Consumer Awareness About E-banking with special reference to Tumkur City

Customer Awareness Towards E-banking Services With Special Reference To Tumkur City.
Sri Siddartha Institute of Business Management, Maralur, Tumkuru. Page 1
CHAPTER: 1
INTRODUCTION
1.1FINANCE
Finance describes the management, creation and study of money, banking, credit,
investments, assets and liabilities that make up financial systems, as well as the
study of those financial instruments. Some people prefer to divide finance into
three different categories:
1. Public finance
2. Corporate finance
3. Personal finance
Public finance includes tax systems, government expenditures, budget procedures,
stabilization instruments, debt issues and other government concerns. Corporate
finance involves managing assets and debt for a business. Personal finance
includes proper management of an individual’s income and expenses so enough
money is left over for savings.
FINANCIAL SERVICES
Financial services can also be called as financial intermediation. An entity whose
income exceeds its expenditure can lend or invest the excess income to help that
excess income produce more income in the future. Though on the other hand, an
entity whose income is less than its expenditure can raise capital by borrowing or

selling equity claims, decreasing its expenses, or increasing its income. The lender
can find a borrower- a financial intermediary such as Bank- or buy notes or bonds
(corporate bonds, government bonds or mutual bonds) in bond market. The lender
receives interest, the borrower pays a higher interest than the lender, and the
financial intermediary earns the difference for arranging the loan.
The bank aggregates the activities of many borrowers and lenders. A bank accepts
deposits from lenders, on which it pays interest. The bank then lends these deposits
to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate
their activity.
Thus the term financial service means “mobilizing and allocating funds or
savings”. So it includes all the activities involved in transformation of savings into
investments.
Every country needs the services of financial institution for accelerating the pace
of development. The main sectors of financial service industry are Banks,
Financial institutions and Non-banking financial company. Following
institutions acts as financial intermediates providing financial services:
1. Banks and financial institutions
2. Insurance companies
3. Credit card issue company
4. Mutual funds organization
5. Stock exchanges
6. Leasing companies
7. Unit trusts etc

The significance of financial services is as follows:
a. Providing funds
b. Employment generation
c. Accelerating industrialization
d. Development of backward areas etc
1.2 INDUSTRY PROFILE
1.21 INTRODUCTION OF BANKING INDUSTRY
Banking
The word “bank” is derived from a Latin word ‘Bancus’ or ‘Banque’, which
means a bench. In the early days the European moneylenders and money
changers used to sit on the benches and exhibit coins of different countries in
big heaps for the purpose of changing and lending money.
As per Banking Regulation Act 1949 Section 5(b)
“Banking means, accepting for the purpose of lending or investment, of
deposits of money from the public, repayable on demand or otherwise, and
withdrawal by cheque, draft, or otherwise.”
The banking industry is and always has been one of the most important
aspects of all industries. The reason being, every other industry needs banks to
take part in any investments or financial movements as a way to better their

position in their industries. The industry analysis will look at how and why the
banking industry has been able to hold this position for so long through the
competitive landscape.
Banking in its modern sense evolved in the 14th
century in the rich cities of
Renaissance Italy but in many ways was a continuation of ideas and concepts of
credit and lending that had their roots in the ancient world. In the history of
banking, a number of banking dynasties –notably, the Medicis, the Fuggers, the
Welsers, the Berenbergs and the Rothchilds- have played a central role over
many centuries. The oldest existing retail bank is Banca Monte dei Paschi di
Siena, while the oldest existing merchant bank is Bereberg Bank.
1.22 HISTORY OF BANKING
The history of banking refers to the development of banks and banking
throughout history, with banking defined by contemporary sources as an
organization which provides facilities for acceptance of deposits and provision for
loan.
The history begins with the first prototype banks of merchants of the ancient
world, which made grain loans to farmers and traders who carried goods between
cities. This began around 2000 BC in Assyria and Babylonia. Later, in ancient
Greece and during the Roman Empire, lenders based in temples made loans and
added two important innovations: they accepted deposits and changed money.
Archaeology from this period in ancient China and India also shows evidence of
money lending activity.

Many histories position the crucial historical development of a banking system to
medieval and Renaissance Italy and particularly the affluent cities of Florence,
Venice and Genoa.
The Bardi and Peruzzi families dominated banking in 14th
century Florence,
establishing branches in many other parts of Europe. The most famous Italian bank
was Medici bank, established by Giovannni Medici in 1397. The oldest bank still
in existence is Banca Monte dei Paschi di Siena, headquartered in Siena, Italy,
which has been operating continuously since 1472.
The development of banking spread from northern Italy through the Holy Roman
Empire, and in the 15th
and 16th
century to northern Europe. This was followed by
number of many innovations that took place in Amsterdam during the Dutch
Republic in 17th
century and in London in the 18th
century. During the 20th
century,
developments in telecommunication and computing caused major changes to
bank’s operations and let bank dramatically increase in size and geographic spread.
The financial crisis of 2007-08 caused many bank failures, including some of the
largest banks, and provoked much debate about bank regulation.
1.23HISTORY OF BANKING IN INDIA
Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should
be able to meet new challenges posed by the technology and any other external and
internal factors.
For the past three decades India’s banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer

confined to only metropolitans or cosmopolitans in India. In fact, Indian banking
system has reached even to the remote corners of the country. This is one of the
main reasons of India’s growth process.
The government’s regular policy for Indian bank since 1969 has paid rich
dividends with the nationalization of 14 major private banks of India. Not long
ago, an account holder had to wait for hours at the bank counters for getting a draft
or for withdrawing his own money. Today, he has a choice. Gone are days when
the most efficient bank transferred money from one branch to other in two days.
Now it is simple as instant messaging or dials a pizza. Money has become the
order of the day.
The first in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct
phases they are as mentioned below:
PHASE 1: Early phase from 1786 to 1969 of Indian Banks.
PHASE 2: Nationalization of Indian Banks and up to 1991 prior to Indian banking
sector reforms
PHASE 3: New phase of Indian Banking System with the advent of Indian
Financial and Banking Sector Reforms after 1991.

PHASE 1
The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank. The East India Company established Bank of Bengal
(1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units
and called it Presidency Banks. These three banks were amalgamated in 1920 and
Imperial Bank of India was established which started as private shareholders
banks, mostly European shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.
Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda,
Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of
India came in 1935.
During the first phase the growth was very slow and bank also experienced
periodic failures between 1913 and 1948. There were approximately 1100 banks,
mostly small. To streamline the functioning and activities of commercial banks,
the Government of India came up with the Banking Companies Act,1949 which
was later changed to Banking Regulation Act 1949 as per amending Act of1965
(Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for
the supervision of banking in India as the Central Banking Authority.
During those days public had lesser confidence in the banks. As an aftermath,
deposit mobilization was slow. Abreast of it the savings bank facility provided by
the Postal department was comparatively safer. Moreover, funds were largely
given to traders.

PHASE: 2
Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive
banking facilities on a large scale especially in rural and semi-urban areas. It
formed State Bank of India to act as the principal agent of RBI and to handle
banking transactions of the Union and State Governments all over the country.
Several banks forming subsidiary of State Bank of India was nationalized in
1960 on 19th
July, 1969, major process of nationalization was carried out. It was
the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major
commercial banks in the country were nationalized.
Second phase of nationalization Indian Banking Sector Reforms was carried out
in 1980with seven more banks. This step brought 80% of the banking segment in
India under Government ownership.
The following are the steps taken by the Government of India to Regulate
Banking Institutions in the Country:
1949: Enactment of Banking Regulation Act.
1955: Nationalization of state Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose
to approximately 800% in deposits and advances by 11,000%.
PHASE: 3
This phase has introduced many more products and facilities in the banking sector
in its reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was set up by his name which worked for the liberalization of banking
practices.
The country is flooded with foreign banks and their ATM stations. Efforts are
being put to give satisfactory service to customer. Phone banking and net banking
is introduced. The entire system became more convenient and swift. Time is given
more importance than money.
The financial system of India has shown a great deal of resilience. It is sheltered
from any crisis triggered by any external macroeconomics shock as other East
Asian Countries suffered. This is all due to a flexible exchange rate regime, the
foreign reserves are high, the capital account is not yet fully convertible, and banks
and their customers have limited foreign exchange exposure.

TABLE 1.23: LIST OF BANKS IN INDIA
Public sector banks Private sector banks Foreign banks
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental bank of commerce
Punjab and Sind Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank of India
Vijaya Bank
IDBI Bank
Bank of Punjab Ltd.
Centurion Bank Ltd.
Development Credit Bank
Ltd.
HDFC Bank Ltd.
ICICI Bank Ltd.
IndusInd Bank Ltd.
Kotak Mahindra Bank Ltd.
UTI Bank Ltd.
Yes Bank Ltd
Bank of Rajasthan Ltd.
Dhanalakshmi Bank Ltd.
Federal Bank Ltd.
ING Vysya Bank Ltd.
Jammu and Kashmir Bank
Ltd.
Karnataka Bank Ltd.
Karur Vysya Bank Ltd.
Ratnakar Bank Ltd.
SBI
Commercialand
International Bank Ltd.
South Indian Bank Ltd
United Western Bank Ltd
ABN-AMRO Bank N.V
Abu Dhabi Commercial
bank Ltd.
American Express Bank
Ltd.
BNP Paribas
Citibank N.A
DBS Bank Ltd.
HSBC Bank Ltd.
Standard chartered Bank

1.24 GLOBALISATION AND ITS IMPACT
During the past decade, commercial banks have witnessed dramatic change in
information and telecommunication technologies (called ICT). For instance, the
use of electronic communication, such as electronic bill paying, home banking, and
internet transaction, has been altering the relationship of business-to-business
(B2B) and business-to-customer (B2C). The marketing accessibility of financial
institutions is extended and increased to remote areas or countries via the new
telecommunication technology. Hence, the role of ICT investments becomes more
important in the banking industry. This trend is also called e-banking.
The impacts of ICT in banking are categorized into three categories:
1) Globalization, 2) deregulation, and 3) consolidation (Nieto, 2001).
First, commercial banks can outreach clients via electronic communications
devices to the extent that foreign customers are able to process transactions across
national borders. Thus the banking market is marching toward globalization.
Globalization is a process of interaction and integration among the people,
companies, and governments of different nations, a process driven by international
trade and investment and aided by information technology. This process has effects
on the environment, on culture, on political systems, on economic development
and prosperity, and on human physical well-being in societies around the world.
Second, accompanying globalization, deregulation in the banking industry prevails
in many countries in order to improve the competitive strength of the financial
industry of the nation. Third, new technologies also enlarge the capacities of
financial institutions and thus improve their cost efficiency. Therefore, more and
more commercial banks have merged together to attain a higher level of efficiency
than before. These issues on e-banking are international. Since the consolidation of

financial institutions may take place across countries with different regulatory
rules, the international supervision on the banking regulation is urgent.
Electronic banking is the wave of the future. It provides enormous benefits to
consumers in terms of the ease and cost of transactions. But it also poses new
challenges for country authorities in regulating and supervising the financial
system and in designing and implementing macroeconomic policy. Electronic
banking has been around for some time in the form of automatic teller machines
and telephone transactions. More recently, it has been transformed by the internet,
a new delivery channel for banking services that benefits both customers and
banks. Access is fat, convenient, and available around the clock, whatever the
customer’s location may be. Plus, banks can provide services more efficiently and
at substantially lower costs. Electronic banking also makes it easier for customers
to compare bank’s services and products, which increases competition among
banks, and allows banks to penetrate new markets and thus expand their
geographical reach. Some even see electronic banking as an opportunity for
countries with underdeveloped financial systems to leapfrog development stages.
Customers in such countries can access services more easily from banks abroad
and through wireless communication systems, which are developing more rapidly
than traditional “wired” communication networks. The flip side of this
technological boom is that electronic banking is not only subject to, but may get
worsen in some of the same risks-particularly governance, legal, operational, and
reputation in traditional banking. In addition, it poses new challenges. In response,
many national regulators have already modified their regulations to achieve their
objectives: ensuring the safety and soundness of the domestic banking system,
promoting market discipline, and protecting customer rights and the public trust in
the banking system. Policymakers are also becoming increasingly aware of the

greater potential impact of macroeconomics policy on capital on capital
movements.
1.25CHANGES IN THE STRUCTURE OF BANKS
The financial sector reforms ushered in the year 1991 have been well calibrated
and timed to ensure a smooth transition of the system from a highly regulated
regime to a market economy. The first phase of reforms focused on modification in
the policy framework, improvement in the financial health through introduction of
various prudential norms and creation of a competitive environment. The second
phase of reforms started in the latter half of 90s, targeted strengthening in the
foundation of banking system, streamlining procedures, upgrading technology and
human resources development and further structural changes. The financial sector
reforms carried out so far have made the balance sheets of banks look healthier and
helped them move towards achieving global benchmarks in terms of prudential
norms and best practices.
Technology is expected to be the main facilitator of change in the financial
sector. Implementation of technology solutions involves huge capital outlay.
Besides the heavy investment costs, technology application also have a high degree
of obsolescence. Banks will need to look for ways to optimize resources for
technology applications. In this regard, global partnerships on technology and
skills sharing may help.
The pressure on capital structure is expected to trigger a phase of consolidation
in the banking industry. Banks could achieve consolidation through different ways.
Mergers between public sector banks or public sector banks and private banks

could be the next logical thing/ development to happen as market players tend to
consolidate their position to remain in competition.
Public sector banks had, in the past, replied on Government support for capital
augmentation. However, with the Government making a conscious decision to
reduce it’s holding in banks, most banks have approached the capital market for
raising resources. It is expected that pressure of market forces would be the
determining factor for the consolidation in the structure of these banks. If the
process of consolidation through mergers and acquisitions momentum, that could
see the emergence of a new large Indian banks with international character.
1.26 WHAT IS E-BANKING?
E-banking is an abbreviation for electronic banking. E-banking allows you to
conduct bank transactions online, instead of finding a bank and interacting with a
teller. Most U.S. banks offer e-banking though the extent of services may vary. For
instance some banks may offer unlimited bill pay options while others restrict
online activity. For many consumers electronic banking means 24-hour access to
cash through automated teller machine (ATM)or Direct Deposit of pay checks into
checking or savings accounts. But electronic banking now involves many different
types of transactions. Traditional banks offer many services to their customers,
including accepting customers’ money deposits, providing various banking
services to customers, and making loans to individuals and companies. Compared
with traditional channels of offering bank services through physical branches,
e-banking uses the internet to deliver traditional banking services to their
customers, such as opening accounts, transferring funds, and electronic bill
payments. First conceptualized in the mid-1970s, some banks offered customer’s

electronic banking in 1985. The internet explosion in the late-1990s, made people
more comfortable with making transactions over the web. Despite the dot-com
crash, e-banking grew alongside the internet.
IN SHORT
 Banking is a combination of two, Electronic technology and banking.
 Electronic banking is a process by which a customer performs banking
transactions electronically without visiting their banks.
 E-banking donates the provision of banking and related service through
extensive use of information technology without direct recourse to the bank
by the customer.

1.27 DEFINITION OF E-BANKING
E-banking is defined as automated delivery of new and traditional banking
products and services directly to customers through electronic interactive
communication channels. It includes the systems that enable financial institutions
customers, individuals or business, to access accounts, transact business, or obtain
information on financial products and services through a public or private network,
including the internet. Customer’s access e-banking services using an intelligent
electronic device, such as a pc, personal digital assistant, ATM, kiosk, touch tone
telephone. E-banking is the term that describes all transactions that take place
among companies, organizations, and individuals and their banking institutions.
HISTORY OF E-BANKING
 E-banking history dates back to 1980s.
 The term online became popular in the late ‘80s and referred to use of a
terminal, keyboard and TV (or monitor) to access the banking system using
a phone line.
 Stanford federal credit union was the first who offer online internet banking
services to all of its members in 1994
 Later on snapped up by other banks like Well Fargo, Chase Manhattan and
Security First Bank

1.28 NEED FOR E-BANKING
One has to approach the branch in person, to withdraw cash or deposit a cheque
or request a statement of accounts. In true internet banking, any inquiry or
transaction is processed online without any reference to the branch (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 a norm
rather than an exception in many developed countries due to the fact that it is the
cheapest way of providing banking services. Banks have traditionally been in the
forefront of harnessing technology to improve their products, services and
efficiency. They have, over a long time, been using electronic and
telecommunication networks for delivering a wide range of value added products
and services. The delivery channels include direct dial- up connections, private
networks, public networks, etc and the devices include telephone, personal
computers including the automated teller machine, etc. With the popularity of PCs,
easy access to Internet and World Wide Web (WWW), internet is increasingly
used by banks as a channel for receiving instructions and delivering their products
and services to their customers. This form of banking is generally referred to as
Internet Banking, although the range of products and services offered by different
banks vary widely both in their content and sophistication.
1.29 ROLE AND SIGNIFICANCE OF E-BANKING
E-banking has transformed the financial industry. Banking customers can
perform most transactions by themselves on their own computer at hours that work
for them. No longer do customers have to wait in lines at the bank or rush to get to

their bank before it closes. They can withdraw cash, perform transfers and make
payments with the click of a mouse.
Internet banking is convenient for those who are working from home, have limited
time or want to keep track of their finances 24 hours a day. Internet banking allows
account holders to transfer funds, pay bills, keep a more accurate balance ledger
and report fraudulent transactions and more. Anyone who has a laptop or desktop
computer with internet access may do their banking from anywhere in the world.
There is a potential for identity theft or fraud when consumers use internet
banking. Financial institutions have software programs in place to deter criminal
activity. Account holders can protect themselves by using a firewall on their own
computers. Financial institutions prefer online banking because it reduces
manpower, attracts consumers and make financial reporting easier. Consumers can
enjoy the benefits of banking at a time and place of their choice. Internet banking
is a fact of life for many individuals today with a busy lifestyle. Some individuals
will have a brick and mortar bank that offers internet banking in addition to going
to the brick and mortar location. Other banks exist only on the internet that does
not have physical location.
Computers were originally designated for a minor role in banks, primarily intended
to facilitate accounting transactions. Subsequently, once its superiority was firmly
established, it grew as a tool for management information and a host of other
inventions.
Banks now have come under great pressure to reduce operational costs to
safeguard their bottom lines. With banking turning more and more customer-
centric with every passing day, technology as an enabler has helped banks to
launch a whole array of customer-centric products such as ATMs, Debit cards,

credit cards, 24 hour anywhere banking. Customer Relations Management is now a
very potential concept. Internet banking also has a role to play in ensuring a fair
return to shareholders, by ensuring great profits to the banking sector. The recent
emerging trends in self-service channels, namely ATMs, Call-centers, Internet and
Mobile banking would increase the use of e-banking as this offer the twin benefit
i.e. convenience to the customers and reduction in cost of operations to the banks.
The popularity of internet banking likely depends upon inculcating in customers
about their security and personal privacy of their money and asset.
1.30 TYPES OF INTERNET BANKING
Understanding the various types of Internet banking will help examiners assess
the risks involved. Currently, the following three basic kinds of Internet banking
are being employed in the marketplace.
 INFORMATIONAL
This is the basic level of internet banking. Typically, the bank has marketing
information about the bank’s products and services on a stand-alone server.
The risk is relatively low, as informational systems typically have no path
between server and the bank’s internal network. This level of internet
banking can be provided by the banks or outsourced. While the risk to a
bank is relatively low, the server or web site may be vulnerable to alteration.
Appropriate controls therefore must be in place to prevent unauthorized
alterations to the bank’s server or website.

 COMMUNICATIVE
It is interactions between the bank’s system and the customers. The
interaction may be limited to electronic mail, account enquiry, loan
application, or static file updates (name and address change). Because these
servers may have a path to the bank’s internal networks, the risk is higher
with this configuration that within formational systems. Appropriate controls
need to be in the place to prevent, monitor and alert management of any
unauthorized attempt to access the bank’s internal networks and computer
systems.
 TRANSACTIONAL
This level of Internet banking allows customers to execute transactions.
Since a path typically exists between the server and the bank or outsourcer’s
internal network, this is the highest risk architecture and must have the
strongest controls. Customer transactions can include accessing accounts,
paying bills, transferring funds etc.
1.31 SERVICES AVAILABLE THROUGH E-BANKING
Bill payment service
You can facilitate 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
your bills, all you need to do is complete a simple one-time registration for each
bill. Generally, the bank does not charge customers for online bill payment.

Fund transfer
You can transfer any amount from one account to another. Customer can send
money anywhere in India. Once you login to your account, you need to mention
the payee’s account number, his bank and the branch. The transfer will take place
in a day or so.
Credit card customers
With internet banking, customers can not only pay their credit card bills online but
also get a loan on their cards. If you lose your credit card, you can report lost card
online.
Railway pass
Indian railways have tied up with ICICI bank and you can now make your railway
pass for local trains online. The pass will be delivered to you at your doorstep. But
the facility is limited to Mumbai, Thane, Nashik, Pune etc.
Shopping
With a range of all kind of products, you can shop online and the payment is also
made conveniently through your account. You can also buy railway and air tickets
through internet banking.
Investing through internet banking
You can now open an FD online through funds transfer. Now investors with
interlinked demat account and bank account can easily trade in the stock market
and the amount will be automatically debited from their respective bank accounts
and the shares will be credited in their demat account. Moreover some banks even
give you the facility to purchase mutual funds directly from the online banking

system. Nowadays, most leading banks offer both online banking and demat
account. However if you need to sign a special form, this will link your two
accounts.
Recharge your prepaid phone
Now just top-up your prepaid mobile cards by logging in to Internet banking. By
just selecting your operator’s name, entering your mobile number and the amount
for recharge, your phone is again back in action with few minutes.
1.32 VARIOUS FORMS OF E-BANKING
INTERNET BANKING
It helps you handle many banking transactions via your
personal computer. For instance, you may use your computer
to view your account balance, request transfer between
accounts, and pay bills electronically. Internet banking system
is a method in which a personal computer is connected by a network service
provider directly to a host computer system of a bank such that customer service
requests can be processed automatically without need for intervention by customer
service representatives. The system is capable of distinguishing between those
customer service requests which are capable of automated fulfillment and those
requests which require handling by a customer service representative. The system
is integrated with the host computer system of the bank so that the remote banking
customer can access other automated services of the bank. The method of the
intervention includes steps of inputting a customer banking request from among a
menu of banking requests at a remote personnel computer, transmitting the

banking requests to a host computer and receiving it, identifying the type of
customer banking request received, automatic logging of the service request,
comparing the request to a stored table of request types, each of the request types
having an attribute to indicate whether the request type is capable of being fulfilled
by a customer service representative or by an automated system and depending
upon the attribute , directing the request either for handling by a customer service
representative or to a queue for processing by an automated system.
AUTOMATED TELLER MACHINES (ATM).
An unattended electronic machine in a public place, connected to
a data system and related equipment and activated by a bank customer to obtain
cash withdrawals and other banking services is called as automated teller machine,
cash machine or called money machine. An automated teller machine (ATM) is an
electronic computerized telecommunications device that allows a financial
institution’s customers to directly use a secure method of communication to access
their bank accounts, in order to make cash withdrawals( or cash advances using a
credit card) and check their account balances without the need for a human bank
teller. Many ATMs also allow people to deposit cash or cheques, transfer money
between their bank accounts, top up their mobile phone’s pre-paid accounts or
even buy stamps. On most modern ATMs, the customer identifies him or herself
by inserting a plastic card with a magnetic stripe or a plastic smartcard with a chip
that contains his or her account number. The customer then verifies their identity
by entering a pass code, often referred to as a PIN (personal identification number)

of four or more digits. Upon successful entry of the PIN, the customer may
perform a transaction. If the number is entered incorrectly several times in a row
(usually three attempts per card insertion), some ATMs will attempt retain the card
as a security precaution to prevent an unauthorized user from discovering the PIN
by guesswork. Captured cards age often destroyed if the ATM owner is not the
card issuing bank, as non customer’s identification cannot be reliably confirmed.
The Indian market today has approximately more than 17000 ATMs.
TABLE NO: 1.32 NUMBER OF BRANCHES AND ATM’S OF DIFFERENT
BANKS IN INDIA
BANK NUMBER OF
BRANCHES
NUMBER OF
ATM
SBI
Bank of Baroda
PNB
Canara Bank
Bank of India
IDBI Bank
Union Bank
Oriental Bank
Syndicate Bank
Allahabad Bank
Corporation Bank
14119
4043
4706
3050
3079
821
3206
1508
2368
1069
1073
2644
2506
6389
2734
1830
1786
3897
1783
1240
987
1765

Some advantages of ATMs to customers:
1. Ability to draw cash after normal banking hours.
2. Quicker than normal cashier service.
3. Complete security as only the card holder knows the PIN.
4. Does not just operate as the medium of obtaining cash.
5. Customer can sometimes use the service of other bank ATM’s.
TELE BANKING OR PHONE BANKING:
Undertaking a host of banking related services including
financial transactions from the convenience chosen place anywhere across the
globe and any time of the day and night has now been made possible by
introducing on-line telebanking services. By dialing the given telebanking number
through a landline or a mobile from anywhere, the customer can access his account
and by following the user-friendly menu, entire banking can be done through
Interactive voice response (IVR) System. With sufficient numbers of hunting lines
made available, customer call will hardly fail. The system is b-lingual and has
following facilities offered:
1. Automatic balance voice out for the a default account.
2. Balance inquiry and transaction Inquiry.
3. Inquiry of all term deposit accounts

4. Statement of account by fax, e-mail or ordinary mail.
5. Cheque book request
6. Stop payment which is on-line and instantaneous.
7. Utility bill payments.
8. Renewal of term deposit which is automatic and instantaneous.
9. Voice out of last five transactions.
SMART CARDS
A smart usually contains an embedded 8-bit microprocessor
(a kind of computer chip). The microprocessor is under a contact pad on one side
of the card. Think of the microprocessor as replacing the usual magnetic stripe
present on a credit card or debit card. The microprocessor on the smart card is
there for security. The host computer and the card reader actually “talk” to the
microprocessor. The microprocessor enforces access to the data on the card. The
chips in these cards are capable of many kinds of transactions. For example, a
person could make purchase from their credit account, debit account or from a
stored account value that’s reloadable. The enhanced memory and processing
capacity of the smart card is many times that of traditional magnetic-stripe cards
and can accommodate several different application on a single card. It can also
hold identification information, which means no more shuffling through cards in
the wallet to find the right one, the smart card will be the only one needed. Smart
cards can also be used with a smart card reader attachment to a personal computer
to authenticate a user.

Smart cards are much more popular in Europe than in the U.S. In Europe the
health insurance and banking industries use smart cards extensively. Every German
citizen has a smart card for health insurance. Even though smart cards have been
around in their modern form for at least a decade, they are just starting to take off
in the U.S
DEBIT CARD
Debit card also called as check cards. Debit cards look like credit cards or ATM
(Automated teller machine) cards, but operate like cash or a personal cheque. Debit
cards are different from credit cards. While a credit card is a way to “pay now”.
When you use a debit card, your money is quickly deducted from your checking or
savings account. Debit are accepted at many locations, including grocery stores,
retail stores, gasoline stations, and restaurants. You can use your card anywhere
merchants display your card’s brand name or logo. They offer an alternative to
carrying a cheque book or cash.
E-CHEQUE
1. An E-Cheque is the electronic version or representation of paper cheque.
2. The information and legal framework on the E-Cheque is the same as that of
the paper cheque.
3. It can now be used in the place of paper cheques to do any and all remote
transactions.

4. An E-Cheque work the same way a cheque does, the cheque writer “writes”
the E-cheque using one of many types of electronic devices and “gives” the
E- cheque to the payee electronically. The payee “deposits” the electronic
cheque receives credit, and the payee’s bank “clears” the E-cheque to the
paying bank. The paying bank validates the E-cheque and then “charges” the
cheque writer’s account for the cheque.
INTER BANK TRANSFER
Inter bank transfer is a special service that allows you to transfer funds
electronically to accounts in other banks in India through:
NEFT
The acronym “NEFT” stands for National Electronic Fund Transfer. Funds are
transferred to the credit account with the other participating bank using RBI’s
NEFT service. RBI acts as the service provider and transfers the credit to the other
bank’s account.
RTGS
The acronym “RTGS” stands for Real Time Gross Settlement. The RTGS system
facilitates transfer of funds from accounts in one bank to another on a “real time’
and on “gross settlement” basis. The RTGS system is the fastest possible inter
bank money transfer facility available through secure banking channels in India. In
other words, this is an electronic payment processing environment wherein
transactions are settled as soon as they are processed.

EFT
Electronic Fund Transfer is the new facility provided to the exporters for
submitting the license fee through the internet without visiting bank for the
payment. This procedure is being proposed to facilitate payments through
electronic means. The facility shall be available only for electronically filed
applications. Currently Electronic payment can be made through following banks:
ICICI, IDBI, HDFC, UTI, State Bank of India, Bank of India, Punjab National
bank and Union Bank of India.
1.33 TYPES OF BANK PROVIDING E-BANKING SERVICES
There are two types of bank that offer e-banking service:
1. Traditional High Street Bank.
2. Internet –only Bank.
Traditional high street banks:
Many high street banks are offering e –banking service for business customers as
an alternative to or to complement traditional branch banking. They are providing
two different method of connection to the customer account direct dial/pc banking
and verb based internet banking.
Internet-only Bank;
A number of banks have no branch networks and are elusive to the internet. The
internet- only banks are: Griffon Bank, Zion’s Bank, Comp Bank, and first-e
Bank. Internet bank offers a number of services in addition to regular bank

account, from credit card and also loan to insurance and investment. Such banks
tend to offer a better rate and deal than regular high street banks. It is cost effective
than high street bank.
1.34 E-BANKING COMPONENTS
Financial institutions may choose to support their E-banking services
internally. Alternatively, financial institutions can outsource any aspect of their E-
banking systems to third parties. The following entities could provide or host (i.e.,
allow applications to reside on their servers) e- banking related services for
financial institution:
1. Another financial institution.
2. Internet service provider.
3. Internet banking software vendor or processor.
4. Core banking vendor or processor.
5. Managed security service provider.
6. Bill payment provider.
7. Credit bureau.
8. Credit scoring company.
Through a combination of internal and outsourced solutions, management has
many alternatives when determining the overall system configuration for the
various components of an e-banking system. However, for the sake of simplicity, it
presents only basic variations. One or more technology service providers can host
e-banking application and numerous network components. While the institution
does not have to manage the daily administration of these component systems, its
management board remains responsible for the content, performance, and security
of the banking system.

E-BANKING

1.35 DRIVING FORCES TO E-BANKING.
According to IT analyst firm, by coming years, a large sophisticated and highly
competitive E-banking market will develop will be driven by:
1. Demand side pressure due to increasing access to low cost electronic
services.
2. Growing customer awareness and need of transparencies.
3. Global players in the dispute.
4. Close integration of bank with web based E-commerce or even
disintegration of services through direct electronic payment.
5. More convenient international transactions due to the fact that internet along
with general deregulation trends eliminates geographic boundaries.

1.36 PROS AND CONS OF INTERNET BANKING
PROS
 Convenience
Unlike your corner bank, online banking sites never close, they’re
available 24 hours a day, seven days a week and they’re a mouse click
away.
 Ubiquity
If you’re out of state or even out of the country when a money
problem arises, you can log on instantly to your online bank and take
care of business, 24/7.
 Transaction speed
Online bank sites generally execute and confirm transaction at or
quicker than ATM processing speeds.
 Efficiency
You can access and manage all of your bank accounts, including
IRA’s, CDs, even securities, from one secure site.
 Effectiveness
Many online banking sites now offer sophisticated tools, including
account aggregation, stock quotes, rates alert and portfolio managing
program to help you manage all of your assets more effectively. Most
are also compatible with money managing programs such as quicken
and Microsoft money.

CONS
 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. If you and your
spouse wish to view and manage their assets together online, one of
you may have to sign a durable power of attorney before the bank will
display all of your holdings together.
 Learning curves
Banking sites can be difficult to navigate at first. Plan to invest some
time and/or read the tutorials in order to become comfortable in your
virtual lobby.
 Bank site changes
Even the largest banks periodically upgrade their online programs,
adding new features in unfamiliar places. In some cases, you may
have to re-enter account information.
1.37 INTERNET BANKING VERSUS TRADITIONAL BANKING
In spite of so many facilities that internet banking offer us, we still seem to
trust our traditional method of banking and is reluctant to use online banking. But
here are few cases where internet banking will turn out to be a better option in
terms of saving your money. ‘Stop payment’ done through internet banking will
not cost extra fees but when done through the branch, the bank may charge you Rs
50 per cheque plus the service tax. Through internet banking, you can check your
transactions at any time of the day, and as many times as you want to. On the other
hand, in a traditional method, you ret quarterly statements from the bank and if you

request for a statement at your required time, it may turn out to be expensive affair.
The branch may charge you Rs 25 per page, which includes only 30 transactions.
Moreover, the bank branch would take eight days to deliver it at your doorsteps. If
the fund transfer has to be made outstation, where the bank does not have a branch,
the bank would demand outstation charges. Whereas with the help of online
banking, it will be absolutely free for you. As per the internet and mobile
association of India’s report on online banking 2006, “There are many advantages
of online banking. It is convenient, it isn’t bound by operational timings, there are
no geographical barriers and the services can be offered at a miniscule cost”.
1.38 THEORITICAL BACKGROUND
CONSUMER AND CONSUMER AWARENESS
CONSUMER
A consumer is a person or organization that uses economic services or
commodities. In economic systems consumers are utilities expressed in the
decision to trade or not.
The consumer is the one who pays to consume
goods and services produced .As such,
consumers play a vital role in the economic
system of the nation. Without consumer
demand, producers would lack one of the key
motivations to produce: to sell to consumers.
The consumer also forms part of the chain distribution.
Largely due to rise of internet, consumers are shifting more and more towards
becoming “prosumers”, consumers that are also producers (often of information

and media on the social web) or influence the products created.
AWARENESS
Awareness is the ability to directly know and perceive, to feel, or to be of events.
More broadly, it is the state or quality of being conscious of something. It is
nothing but having knowledge or discernment of something.
CONSUMER AWAREWNESS
Consumer awareness refers to the understanding by a consumer the product and
their rights in regards to a product or service being marketed or sold, enabling
buyers to get the most from what they purchase. There are four categories in the
concept of consumer awareness: information, choice, safety and the right to be
heard.
Customer awareness is a part of a company’s marketing and communications
plan. It is a process that helps an entrepreneur educate customers about his/her
company, its performances and the products or services his/her company delivers.
A well designed awareness program ensures better customer engagement and
protects consumer welfare.
IMPORTANCE OF CONSUMER AWARENESS
According to Ford, consumer awareness is important because it increases a current
or potential customer’s knowledge about a product or service, allowing him/her to
make a more informed purchase. Increasing consumer awareness also allows

business owners to share background information about their organizations, their
values and their practices.
Business owners increase consumer awareness by employing a wide range of
marketing techniques designed to provide consumers with as much positive
information about their company as possible. If an organization consistently
produces high-quality products, has high safety standards and provides top-notch
customer service, it benefits it to make the public aware of these values through
commercials, billboards or social media campaigns. When a company associates
itself with specific positive values, customer feels more confident making
purchase, notes Ford.
Creating consumer awareness also involves making customers aware of the
company details that have little or nothing to do with the product or service being
offered. For example, a business owner might want the public to know that his
organization supports a specific charity, does not test on animals or uses
environmentally friendly materials. Making consumer aware that a specific cause
is supported, which helps generate a favorable public opinion about the business,
which helps foster customer loyalty and draw in new customers.

CHAPTER: 2
RESEARCH DESIGN
2.1RESEARCH DESIGN
A research design is the set of methods and procedures used in collecting and
analyzing measures of the variables specified in the research problem. The
research design defines the study type (descriptive, correlational, semi-
experimental, experimental, meta-analytic, review) and sub-type (e.g., descriptive-
longitudinal case study), research problem, hypotheses, independent and dependent
variables, experimental design, and, if applicable data collection methods and a
statistical analysis plan. Research design is the framework that has been created to
find answers to research questions.
Research design constitutes the blue print for the collection, measurement and
analysis of data. The present study seeks to identify the extent of awareness of E-
banking services. The research design is descriptive in nature. The research has
been conducted with the customers of bank, Tumkur City. For the selection of the
sample, convenient sampling method was adopted and an attempt has been made to
include all the age groups and gender within the service class.
2.2 TITLE OF THE STUDY:
A study on “Customer Awareness Towards E-banking Services With Special
Reference to Tumkur City.”

2.3 STATEMENT OF THE PROBLEM:
E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic interactive
communication channels. E-banking includes the systems that enable financial
institution, customers, individuals and business to access accounts, transact
business or obtain information on financial products and services through a
network including network.
The actual problem lies in the fact that many of the customers are not much
aware of services provided under E-banking sector. Even if aware, they don’t
prefer because of their lack of ability to access or due to some safety reasons. Thus
many of the customers fails in enjoying the different services provided through E-
banking sector of banks. So here an attempt is made to study the level of awareness
in customers about various services provided under e-banking and about growth
and progress of e-banking.
2.4 SCOPE OF THE STUDY
This study has covered E-banking service sector with reference to Tumkur City
and all the classes of the customers were taken into consideration. This is a realistic
source directly collected from the customers of bank.
The emergence of E-banking has enabled banks to offer real-time transactions
and integrate all customers’ related functions. Indian banks are utilizing the new
technology to provide better technology and convenient access to its customers and
India is thus poised for a huge growth in the world of electronic banking.

2.5 OBJECTIVES OF THE STUDY
The main objective of this study is to examine the awareness of the customers
towards e-banking services of the commercial banks in Tumkur.
1. To study the level of awareness of the customers in electronic banking with
special reference to Tumkur City.
2. To study the growth and progress of electronic banking.
3. To find satisfaction level in electronic banking users of Tumkur City.
4. To analyse0 the problems in E-banking operation faced by customers of
Tumkur City.
5. To offer suggestions to improve the standard of e-banking services.
2.6 RESEARCH METHODOLOGY
Research methodology is the systematic, theoretical analysis of the methods
applied to a field of study. It comprises the theoretical analysis of the body of
methods and principles associated with a branch of knowledge.
A methodology does not set out to provide solutions- it is, therefore, not the
same as a method. Instead, a methodology offers the theoretical underpinning for
understanding which method, set of methods can be applied to specific case.
2.61DATA COLLECTION:
Data collection is an elaborate process in which the researcher makes a planned
search for all the relevant data. Data is the foundation of all research. It is the raw

material with which a researcher functions. Data are facts, and other relevant
materials, past and present, serves as bases for study and analyses
SOURCES OF DATA: following are the methods of sources of data.
PRIMARY DATA:
Primary Data is the original data collected by the researcher. It has a specific
purpose of addressing the problem at hand. A primary is collected for the first time
by an researcher or agency who makes use of the data for the first time. Primary
data after use get converted to secondary data.
Questionnaire was used to collect primary data from respondents. The
questionnaire was structured type and contained questions relating to different
dimensions of e-banking preferences and awareness among service class such as
level of usage, factors influencing the usage of e-banking services, benefits
accruing to the users of e-banking services, problems encountered. The questions
included in the questionnaire were offering multiple choices.
SECONDARY DATA: These are the data which have been collected for another
purpose. Secondary data can be collected either from published data or
unpublished data
1. Books about banking from library.
2. Through internet.

2.62 SAMPLING
Sampling is the component of our research design. A sample is a subgroup of the
population for participation in the study.
SAMPLING UNIT:
It defines the target population that will be sampled i.e. it answers who is to be
surveyed. In this study, the sampling unit is the Customers of bank, Tumkur city.
SAMPLING SIZE:
It indicates the number of people to be surveyed. Though large samples give
more reliable results then small samples but due to constraint of time, the sample
size was restricted to 100 respondents. The respondents belong to different age,
income group and profession of Tumkur City.
SAMPLING TECHNIQUE:
The sampling technique is a procedure for the selection of a sample from the
given population. The term sampling refers to the investigation of a part of whole
population (or) universe.
PROBABILITY SAMPLING
In a probability sampling every unit or individual in the population has equal
chances of being selected as a sample unit. Probability samples are selected in such
a way as to be representative of the population. They provide the most valid (or)
credible result because they reflect the characteristics of the population from which
they are selected.

RANDOM SAMPLING
Random sampling is a type of probability sampling. The term random has a
very precise meaning. Each individual in the population of interest has an equal
likelihood of selection. The entire process of sampling is done in a single step with
each subject selected independently of the other members of the population.
2.63 TYPE OF RESEARCH
Here the type of research is DESCRIPTIVE RESEARCH. In this descriptive
research the researcher collected primary data through questionnaire.
Descriptive research: descriptive research is also called Statistical research.
Describes data and characteristics about the population or phenomenon being
studied. Descriptive research try to discover answers to the questions who, when,
where, and sometimes how. The researcher attempts to describe or define a subject,
often by creating a profile of a group of problems, people, or events. This study
may involve the collection of data and the creation of a distribution of the number
of times the researcher observes the single event or characteristics, or they may
involve relating the interactions of two or more variables.
2.64 TECHNIQUES FOR ANALYSIS:
The data so collected will be analyzed through the application of statistical
techniques, such as BAR GRAPHS and PIE CHARTS.
Bar graphs: A bar graph (also called Bar Chart) is a graphical display of data
using bars of different heights. In brief, a bar chart or bar graph is a chart or graph

that presents grouped data with rectangular bars with lengths proportional to the
values that they represent.
Pie charts: A pie chart (or a circle chart) is a circular statistical graph which is
divided into slices to illustrate numerical proportion. In a pie chart, the arc length
of each slice (and consequently its central angle and area), is proportional to the
quantity it represents.
2.7 LIMITATION OF THE STUDY
There are certain limitations I have faced during this data collection period through
these surveys. In our country, consumers are more likely to be conservative so that
to process the information is difficult. Besides that, we have faced some more
limitations. Those are stated below:
1. Some respondents were hesitating to give true responses and many are not
interested in giving their opinions.
2. Narrow sample size.
3. Time constraints.
4. The inferences apply only to the respondents of Tumkur City and are not
applicable to any other place and cannot be generalized.

CHAPTER-3
DATA ANALYSIS AND INTERPRETATION
I have selected questionnaire method to collect the primary data. Based on the
primary data, the analysis and interpretation are done.
Table 3.1
Table showing distribution of Respondents based on gender:
Sl No. Gender No. of
respondents
Respondents
(in%)
1 Male 66 66%
2 Female 34 34%
Total 100 100%
SOURCE: primary data.
ANALYSIS:
From the above table it is found that, most of the respondents i.e. 66% i.e.
66 respondents are male. Female are 34% i.e. 34 respondents.
INTERPRETATION:
From the above analysis, it is found that women e-banking service users are
less compared to men. This revels that, men e-banking service users are more
which indicates that the willingness to switch to new technology is more in men
rather than women.

Graph 3.1
Graph showing Distribution of Respondents based on Gender
66
34
male
female

Table 3.2
Table showing Distribution of Respondents based on Age:
Sl no Age (years) No. of
respondents
Respondents
(in%)
1 Below 20 years 10 10%
2 20-30 years 44 44%
3 31-40 years 22 22%
4 41-50 years 14 14%
5 Above 50 years 10 10%
total 100 100%
ANALYSIS:
From the above table, it reveals that among 100 respondents i.e. 10
respondents belongs to the age group of below 20 years, 44 respondents belongs to
the age group of 20-30 years, 22 respondents belongs to the age group of 31-40
years, 14 respondents belongs to the age group of 41-50 years and 10 respondents
belongs to the age group of 50 and above.
INTERPRETATION:
From the above analysis, it is found that the majority of e-banking service
users i.e. 44 respondents belongs to the age group of 20-30 years.

Graph 3.2
Graph showing Distribution of Respondents based on age:
0
5
10
15
20
25
30
35
40
45
50
Below 20 yrs 20-30 years 31-40 years 41-50 years above 50
Percentage
Age

Table 4.3
Table showing Distribution of Respondents based on Qualification
Sl.no Qualification Number of
respondents
Respondents
(in%)
1 SSLC 12 12%
2 PUC 12 12%
3 UG 42 42%
4 PG 34 34%
5 Illiterate Nil Nil
total 100 100%
ANALYSIS:
From the above table, it reveals that among 100 respondents 12% are SSLC,
12% are PUC, 42% are under graduates, 34% are post graduates, 0% are illiterates.
INTERPRETATION:
The study revels that the most of the respondents who use e-banking services
are educated and hence this indicates that higher the level of education gives the
awareness and preference for e-banking.

Graph 3.3
Graph showing Distribution of Respondents based on qualification
0
5
10
15
20
25
30
35
40
45
SSLC PUC Under Graduate Post graduate Illiterate
Percentage
Qualification

Table 3.4
Table showing Occupation of Respondents
Sl.no Occupation Number of
respondents
Respondents
(in%)
1 Student 20 20%
2 Job 22 22%
3 Business 30 30%
4 Pension 4 4%
5 Home maker 12 12%
6 Agriculture 10 10%
7 others 2 2%
Total 100 100%
ANALYSIS:
The above table reveals that out of 100 respondents, 20% are students, 22%
are in job, 30% are doing business, 4% are pensioners, 12% are home makers, 10%
are agriculturists and 2% are others.
INTERPRETATION:
The above analysis shows that more business and job people are aware and
using e-banking services in Tumkur city. This indicates that the people with quite
good income are using e-banking services because their bank account requires
frequent transactions.

Graph 3.4
Graph showing Occupation of Respondents
0
5
10
15
20
25
30
35
Student Job Business Pensioner Home
maker
Agriculture Others
Percentage
Occupation

Table 3.5
Table showing Distribution of Respondents based on Income level (per
month)
Sl.no Income level Number of
respondents
Respondents
(in%)
1 Below Rs 10000 18 18%
2 10000-30000Rs 46 46%
3 30000-50000RS 22 22%
4 Above 50000Rs 14 14%
Total 100 100%
ANALYSIS:
From the above table it is found that out of 100 respondents 18% of the
respondents using e-banking services are in the income group of below 10000Rs,
46% of the respondents are in the income group of Rs10000-30000, 22% of the
respondents are in the income group of Rs30000-50000 and 14% are in the income
group of Rs50000 and above.
INTERPRETATION:
In the above analysis, it is observed that the most of the respondents are in
the income group of Rs10000-30000. It reveals that, the level of income level also
influences the usage of e-banking services.

Graph 3.5
Graph showing Distribution of Respondents based on Income level (per
month)
0
5
10
15
20
25
30
35
40
45
50
Below RS10000 10000-30000Rs 30000-50000Rs above 50000Rs
Percentage
Income level

Table 3.6
Table showing respondents awareness about E-banking services
Sl. no Particulars Number of
respondents
Respondents
(in%)
1 Yes 90 90%
2 No 10 10%
Total 100 100%
ANALYSIS:
From the above table, it is found that out of 100 respondents, 90 respondents
i.e. 90% of the respondents are aware and 10% are not aware of E-banking in
Tumkur city.
INTERPRETATION:
The above analysis reveals that majority of them i.e. 90% of the
respondents are aware of E-banking services in Tumkur city where as sadly 10%
are unaware of E-banking services.

Graph 3.6
Graph showing respondents awareness about E-banking services
90
10
Yes
No

Table 3.7
Table showing sources of awareness about E-banking services
Sl.no Particulars Number of
respondents
Respondents
(in %)
1 From bank officials 20 22%
2 Advertisement in
print media
16 18%
3 Television and radio
advertisement
10 11%
4 Online advertisement 16 18%
5 From family
members
18 20%
6 From friends 10 11%
7 Any other Nil Nil
Total 90 100%
ANALYSIS:
From the above table, it is found that out of 90 respondents, 22% of
respondents came to know about E-banking from bank officials, 18% respondents
from advertisement in print media, 11% from television and radio advertisement,
18% from online advertisement, 20% from family members and 11% from friends.
INTERPRETATION:
The analysis reveals that more of the respondents came to know about E-
banking through bank officials. Advertisement in print media, television and radio
advertisement, family members also influence to great extent in bringing
awareness about E-banking.

Graph 3.7
Graph showing sources of awareness about E-banking services
22%
18%
11%
18%
20%
11%
0%
Bank officials
Advertisement in print media
Television and radio
advertisement
Online advertisement
Family members
Friends
other

Table 3.8
Table showing most Preferred E-banking services by Respondents
respondents
Respondents
(in %)
1 ATM 54 60%
2 Mobile banking 6 7%
3 Online banking 14 15%
4 Telephone banking Nil Nil
5 Both 1 and 2 16 18%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents, 60% of the
respondents preferred ATM, 7% prefer mobile banking, 15% prefer online
banking,0% i.e. none of them preferred telephone banking and 18% of the
respondents preferred both ATM and Mobile banking.
INTERPRETATION:
From the analysis it is found that more than half of the respondents i.e. 60%
mostly preferred ATM (Automated teller machine) and rest of 40% prefer other
e-banking services. ATM is most preferred because of its convenience.

Graph 3.8
Graph showing most Preferred E-banking services by Respondents
0
10
20
30
40
50
60
70
ATM Mobile banking Online banking telephone
banking
Both 1 and 2
Percentage
E-banking services

Table 3.9
Table showing important reason to chose a particular Bank for Internet
banking
respondents
Respondents
(in %)
1 Traditional bank
account
50 56%
2 The brand name of the
bank
18 20%
3 The excellent service
provided by bank
22 24%
4 Others 0 0%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents, more that half
i.e. 56% of the respondents chose the particular bank as internet banking because
of the their traditional bank account, 20% because of brand name of the bank,
24% because of the excellent service provided by the bank.
INTERPRETATION:
From the analysis it is found that more than half i.e. 56% of the respondents
chose a particular bank as internet banking because of their traditional bank
account. Therefore using services in a particular bank depends on customer mind
set.

Graph 3.9
Graph showing important reason to chose a particular Bank for Internet
banking
0
10
20
30
40
50
60
Traditional bank
account
brand name of bank excellent service by
bank
others
Percentage
Reasons

Table 3.10
Table showing Frequency of usage of E-banking services
respondents
Respondents
(in %)
1 Once in a day 2 2%
2 Once in a week 44 49%
3 Once in fortnight 24 27%
4 Once in month 12 13%
5 Infrequently 08 9%
Total 90 100%
ANALYSIS:
respondents use E-banking services once in a day or daily, 49% of the respondents
use once in a week, 27% of the respondents use once in a fortnight, 13% of them
use once in a month and 9% of them use infrequently.
INTERPRETATION:
From the analysis it is found that more of them i.e. 49% of the respondents
used e-banking services at least once in a week.

Graph 3.10
Graph showing Frequency of usage of E-banking services
0
10
20
30
40
50
60
Once in a day Once in a day Once in a
fortnight
Once in a month Infrequently
Percentage
Frequency of E-banking service usage

Table 3.11
Table showing from how long respondents has been using E-banking services
Respondents
Respondents
(in %)
1 Less than 6 months 6 7%
2 6 months to 1 year 24 27%
3 1 year to 2 years 40 44%
4 2 years and above 20 22%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 students, 7% of the
respondents are using e-banking services from 6 months, 27% from 6 months to 1
year, 44% from 1year to 2 years, 22% for 2 years and above.
INTERPRETATION:
From the analysis it is found that more of them i.e. 44% of the
respondents are using e-banking services from 1 year to 2 years.

Graph 3.11
Graph showing from how long respondents has been using E-banking services
0
5
10
15
20
25
30
35
40
45
50
Less than 6 months 6 months-1 year 1 year- 2 years 2 years and above
percentage
Duration

Table 3.12
Table showing reasons for Opening Internet Bank account
respondents
Respondents
(in %)
1 Time saving 30 33%
2 Inexpensive Nil Nil
3 Easy processing 12 13%
4 Easy fund transfer 6 7%
5 Safe and secure 16 18%
6 Convenience(24hours) 26 29%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents, 33%of the
respondents open internet bank account because of time saving reason, none
because of the reason inexpensive,13% because of the reason easy processing, 7%
because of the reason easy fund transfer, 18% because of the reason safe and
secure, 29% because of the reason convenience.
INTERPRETATION:
From the analysis it is found that most of the respondents opened internet
bank account because of the reasons time saving and convenience i.e. 33% because
of time saving and 29% because of convenience.

Graph 3.12
Graph showing reasons for Opening Internet Bank account
0
5
10
15
20
25
30
35
Time saving Inexpensive Easy
processing
Easy fund
transfer
Safe and
secure
Convenience
percentage
Reasons to open internet bank account

Table 3.13
Table showing respondents opinion towards operation cost of E-banking
respondents
Respondents
(in %)
1 High cost 58 64%
2 Neutral 32 36%
3 Low cost Nil Nil
Total 90 100%
ANALYSIS:
respondents feels that the operation cost is high, 36% as neutral and none of the
respondents feels it as low.
INTERPRETATION:
feel that the operating cost of E-banking is high. Hence operating cost influence
more on customers in using e-banking services.

Graph 3.13
Graph showing respondents opinion towards operation cost of E-banking
0
10
20
30
40
50
60
70
High Cost Neutral Low cost
percentage
opinion towards operation cost

Table 3.14
Table showing how often respondents visit bank after started using online
banking
respondents
Respondents
(in %)
1 Once in 15 days 14 16%
2 Once in a month 50 55%
3 Once in 3 months 20 22%
4 Never 6 7%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents, 16% of them
visited bank once in 15 days after starting internet banking, 55% of them once in a
month, 22% once in 3 months and 7% never visited.
INTERPRETATION:
From the analysis it is found that more than half i.e. 55% of the respondents
visited bank once in a month. Hence it is understood that customers will visit bank
even after using online banking (for information or any other purpose) but the
frequency has been reduced.

Graph 3.14
Graph showing how often respondents visit bank after started using online
banking
0
10
20
30
40
50
60
Once in 15 days Once in a month Once in 3 months Never
Percentage
Duration

Table 3.15
Table showing respondents convenience in accessing E-banking services
respondents
Respondents
(in %)
1 Easy 42 47%
2 Normal 32 35%
3 Difficult 16 18%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents, 42 respondents
i.e. 47% of them found it easy accessing to e-banking, 32 respondents i.e. 35% as
normal and 16 respondents i.e. 18% as difficult.
INTERPRETATION:
From the analysis it is understood that more of them i.e. 47% of the
respondents felt it easy accessing to e-banking and 35% felt it normal. And it is
found that the level of convenience play an important role in influencing customer
to use e-banking.

Graph 3.15
Graph showing respondents convenience accessing E-banking services
0
5
10
15
20
25
30
35
40
45
50
Easy Normal Difficult
percentage
Level of convenience

Table 3.16
Table showing Difficulties faced by Respondents while using E-banking
respondents
Respondents
(in %)
1 Risky 40 44%
2 Less knowledge 10 11%
3 High cost/fee 22 25%
4 Complex to use 18 20%
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents, 44% of them
found it risky while using E-banking, 11% of them found it difficult because of
less knowledge ,25% faced difficulties due to high cost and 20% due to its
complex nature.
INTERPRETATION:
From the above analysis it is found that more of them i.e. 44% of the
respondents found it risky while using e-banking and 25% of them found it high
cost.

Graph 3.16
Graph showing Difficulties faced by Respondents while using E-banking
0
5
10
15
20
25
30
35
40
45
50
Risky Less knowledge High cost Complex to use
Percentage
Difficulties while using e-banking

Table 3.17
Table showing respondents trust on E-banking Services
respondents
Respondents
(In %)
1 Completely 24 27%
2 Some what 52 58%
3 Dubious 10 11%
4 Not at all 4 4%
Total 90 100%
ANALYSIS:
respondents completely trust E-banking, 58% trust some what, 11% dubious and
4% of the respondents not at all trust.
INTERPRETATION:
From the analysis it is found that majority of the respondents i.e. 58% some
what trust e-banking and 27% of the respondents trust completely. Trust is one of
the factors affecting e-banking service usage.

Graph 3.17
Graph showing respondents trust on E-banking Services
0
10
20
30
40
50
60
70
Completely Some what Dubious Not at all
Percentage
Trust on E-banikg

Table 3.18
Table showing Satisfaction level of respondents towards E-banking services
respondents
Respondents
(in %)
1 Highly satisfied 2 2%
2 Satisfied 52 58%
3 Neutral 34 38%
4 Dissatisfied 2 2%
5 Highly dissatisfied Nil Nil
Total 90 100%
ANALYSIS:
respondents are highly satisfied with E-banking services, 58% are satisfied, 38%
are neutral, 2% are dissatisfied and none are highly dissatisfied.
INTERPRETATION:
of them are satisfied with the E-banking services and 35% are neutral. The
development of E-banking sector largely depends on the satisfaction level of
customers.

Graph 3.18
Graph showing Satisfaction level of respondents towards E-banking services
0
10
20
30
40
50
60
70
H Satisfied Satisfied Neutral Dissatisfied H dissatisfied
Percentage
Satisfaction level

Table 3.19
Table showing expectations of respondents on E-banking services
respondents
Respondents
(In %)
1 Reasonable cost 30 33%
2 Quality services 26 29%
3 Regarding security 34 38%
Total 90 100%
ANALYSIS:
i.e. 33% of the respondent’s expectations is towards cost, 26 respondents i.e. 29%
towards quality services and 34 respondents i.e. 38% regarding security.
INTERPRETATION:
From the analysis it is found that majority i.e. 38% of the respondents are
expecting more regarding security of E-banking services, 33% on reasonable cost.

Graph 3.19
Graph showing expectations of respondents on E-banking services
0
5
10
15
20
25
30
35
40
Reasonable cost Quality services Regarding security
Percentage
Expectations

Table 3.20
Table showing E-banking Contribution towards Development of banking
sector
Respondents
Respondents
(in %)
1 Strongly agree 24 27%
2 Agree 48 53%
3 Neutral 12 13%
4 Disagree 6 7%
5 Strongly disagree Nil Nil
Total 90 100%
ANALYSIS:
From the above table it is found that out of 90 respondents,24 respondents
i.e. 27% of them strongly agree that e-banking contribute more towards
development of banking sector, 48 respondents i.e. 53% will agree, 12 respondents
i.e. 13% are neutral and 6 respondents i.e. 7% will disagree to the point.
INTERPRETATION:
From the analysis it is found that majority i.e. 80% of the respondents
agreed that e-banking contribute more towards development of banking sector.

Graph 3.20
Graph showing E-banking Contribution towards Development of banking
sector
0
10
20
30
40
50
60
Strongly agree Agree Neutral Disagree Strongly
disagree
percentage
Contribution of e-banking

Table 3.21
(For 1st
question with ‘No’ answer)
Table showing Reasons for not using Internet banking
respondents
Respondents
(in %)
1 Not having knowledge
about IB
(internet banking)
2 20%
2 No trust in IB Nil Nil
3 Preference to personal
banking
8 80%
4 Others Nil Nil
Total 10 100%
ANALYSIS:
i.e. 20% of them did not use internet banking due to lack of knowledge and 8
respondents i.e. 80% of them due to preference towards personal banking.
INTERPRETATION:
From the analysis it is found that majority i.e. 80% of the respondents didn’t
use internet banking due to their preference towards personal banking.

Graph 3.21
(For 1st
question with ‘No’ answer)
Graph showing Reasons for not using Internet banking
20
0
80
0
Not having knowledg about
internet banking
No trust in internet banking
Preference to personal
banking
Others

CHAPTER: 4
FINDINGS AND SUGGESTIONS
1. From the above study it was found that, most of the respondents i.e. 66%
i.e. 66 respondents are male.
2. From the above study, it was found that among the respondents more of
them i.e. 44 respondents belong to the age group of 20-30 years and 22
respondents belongs to the age group of 31-40 years.
3. From the above study, it was found that among the respondents 42% are
under graduates, 34% are post graduates.
4. The study reveals that out of 100 respondents, 30% are doing business.
5. The above study reveals that out of 100 respondents, 46% of the
respondents using e-banking services are in the income group of below
10000Rs-30000.
6. From the study it was found that majority i.e. 90% of respondents were aware
and using E-banking services.
7. One comes to know about e-banking through various means, amongst
those it was found that majority of the respondents came to know from bank
officials (22%).
8. Among the E-banking services ATM scores the most preferred service status
(60%).
9. There may be many reasons for choosing a particular bank as internet
banking among them majority of the reason was holding a traditional bank
account (56%).
10. The frequency of usage of E-banking services was at least once in a
week among the service class (49%).

11. From the study it was found that more of the respondents are using e-
banking services from 1 year – 2 years (44%).
12. From the study we can observe that 33% of the respondents benefits time
saving, which becomes the main reason for opening an internet bank account.
13. Operation cost is also an important factor influencing usage of E-banking
services. It was found that majority i.e. 64% of the respondents felt that it is
high.
14. From the study it was found that 55% of the respondents visited bank
once in a month after started using online banking.
15. From the findings it was found that 47% of them found it easy in
accessing e-banking
16. Various difficulties were encountered by customers while using e-
banking. Among them risky (security) ranked by 44%,
17. Trust is very important factor in any kind of services. From the study it
was found that majority of the respondents trusted e-banking some what
(58%).
18. Customer satisfaction is the main aim of any service. Here in this study it
was found that most i.e. 58% were satisfied with E-banking services.
19. From the study it was found that the expectations of respondents were
more regarding security (38%).
20. From the study it was found that most i.e. 53% of the respondents agreed
that e-banking sector will contribute more towards development of banking
sector.
21. From the non users, an attempt was made to elicit the reasons for its non
usage. Preference to personal banking was considered as prime de-
motivating factor.

SUGGESTIONS
1. Customers should be motivated to use E-banking facilities more especially
women.
2. Give proper training to customers for using E-banking
3. Create a trust in the mind of customers towards security of their accounts.
4. Make the sites more users friendly.
5. Provide a platform from where the customers can access different accounts
at single time without extra charge.
6. To provide services such as account information and balances, statement of
account, transaction tracking, mailbox, cheque book issue, stop payment,
financial and customized information.
7. To include additional services such as fund transfer, standing instructions,
opening fixed deposits, intimation of loss of ATM cards.
s

CHAPTER: 5
CONCLUSION
The usage of E-banking is all set to increase among the service class. The
service class at the moment is not using the services thoroughly due to various
hurdling factors like in security and fear of hidden costs etc. so banks should come
forward with measures to reduce the apprehensions of their customers through
awareness campaigns and more meaningful advertisements to make E-banking
popular among all the age and income groups. Further, with increasing consumer
demands, banks have to constantly think of innovative customized services to
remain competitive.
E-banking is an innovative tool that is fast becoming a necessity. It is a
successful strategic weapon for banks to remain profitable in a volatile and
competitive market place of today. In future, the availability of technology to
ensure safety and privacy of E-transactions and the RBI guidelines on various
aspects of internet banking will definitely help in rapid growth of internet banking
in India.

Consumer Awareness About E-banking with special reference to Tumkur City

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