Internet Banking

CHAPTER-1

INTRODUCTION
1.1 ABSTRACT
Banking is undergoing a rapid metamorphosis. Traditionally the business has
been basically the mobilization of savings. The customer put his money in the bank more
out of habit. But today he has choice and the booming mutual fund industry, insurance
and pension sectors are waiting at his doorstep. The Banks have to be anywhere anytime
and at the demand of the customer. Besides, the Net and e-commerce will result in a
paradigm shift for Traditional Banking. Future banking will see megacorporates
emerging as banks themselves. Hence, any bank that does not innovate will be force out
of the reckoning.
At present, banks in the country are wooing customers with automated teller machines
(ATMs) in virtually every city and telebanking is becoming more the norm than the
exception. It can't be denied that a beginning has also been made in Net Banking.
Internet Banking (I-Banking) is also known by the name Net Banking and Cyber
Banking. All these names are related to conducting banking through Internet.
This project work is an attempt to explore the usefulness of the newly innovated
banking tool - Internet Banking.

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1.2 HISTORY
The Internet is an outgrowth of a project from the 1970's by the US department of
defense Advanced Research projects Agency (ARPA). The ARPNET as it was then
called was designed to be a network service for computer communications over a wide
area. In 1973 and 1974, a standard networking protocol, a communication protocol for
exchanging data between computers on a network, emerged from the various research and
educational effects involved in this project. This became known as TCP/IP or the IP suite
of protocol.
The TCP/IP Protocol enabled ARPANT computers to communicate irrespective
of their computer operating system or their computer hardware and hence they were
heterogeneous. UNIX was developed in the same area and TCP/IP became almost
synonymous with the UNIX operating system as UNIX was spread throughout the many
educational institutions around the US for low cost Multi-user systems such s UNIX and
VMS soon became the most popular method of accessing the Internet.
Once the protocols were in place, much of the software and services that make up
the Internet appeared. The basic services for remote connectivity, file transfer and
electronic mail appeared in the mid and late seventies. The USENET news system
appeared in 1981. The Internet GOPHER made its debut in 1982. The World Wide Wed
service appeared in 1989.
In the 1990, the ARPANET had many other networks connected to it and its role
as network backbone was taken over by the NSFNET funded by the National Science
Foundation. The networking companies and organizations which provide the data
connections to all the Internet hosts continued in their goal of providing easy global
network access.
The Internet as it now stands is still one third a research and educational network
because of the many universities and institutes connected to it. Commercial
communications have taken over the majority of Internet traffic.

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Industrial Credit and Investment Corporation of India (ICICI) Bank is a
commercial banking outfit set up by the ICICI Group. The Bank was registered a banking
company on January 5, 1994 and received its banking license from the Reserve Bank of
India on May 17, 1994.
The Bank has an authorized capital of INR 300 crores (USD 75.96 million), of
which subscribed and paid up capital of INR is 165 crores (USD 41.78 million).
The first ICICI Bank branch was started in Chennai in June 1994. As of March
31,1999, 64 branches were functional across the country. By next year 36 more
branches/offices are expected to be added to the network.
The branches are fully computerized with state-of-the-art technology and systems.
All of then are fully networked through V-SAT (satellite) technology. The Bank is
connected to the international SWIFT network since March 1995.
ICICI Bank offers a wide spectrum of domestic and international banking services
to facilitate trade, investment, cross-border business and treasury and foreign exchange
services. This is an addition to a whole range of deposit services offered to individuals
and corporate bodies.
ICICI Bank's Infinity was the first Internet Banking service in the country, and a
prelude to banking in next millennium.
Currently the Bank has around 1,50,000 customers. Electronic commerce is set to
revolutionize the way business is conducted in the future of the e-revolution in India.
ICICI launched I-payments and a pioneering B2B Internet based solution, which
seamlessly integrates its clients with their vendors and suppliers in a closed payment loop,
thereby facilitating superior inventory and receivables management. ICICI also launched
on online utility bill payment system for Internet Banking customers and tie-ups with
several utility service providers in the major Indian meters. They are presently working
on an open loop payment gateway, in collaboration with a Compaq Led Consortium,
which is expected to be a significant driver to future customer acquisition.
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ICICI stands on the fifth rank on the basis of CRAMEL analysis, which was
conducted by Business India panel to choose the Best Banks in India for the year 1999.
CRAMEL stands for Capital adequacy, Resources deployed, Asset quality. Management,
Earning quality and Liquidity.

1.3 ASSOCIATED TECHNOLOGIES

Computerization in Clearinghouses:
The work involved in cheque clearing operations is voluminous, repetitive and
routine in nature. To speed up the process, it was fell that the clearing operations might be
computerized. In the first phase, operation at the clearing houses managed by RBI at 9
major centers viz., Ahmedabad, Bangalore, Mumbai, Calcutta, Hydrabad, Kanpur,
Chennai, New Delhi and Nagpur have been computerized.
The system installed in the clearing houses are also utilized for balancing covering
receipts and payments, transactions on account of Government departments. Further, to
facilitate cheque sorting and to cut delays, high-speed reader sorter systems driven by
powerful IBM 4381 system was installed at Mumbai. Delhi, Chennai and Calcutta. The 4
systems together are now processing about one million instruments per day with Mumbai
clearing houses touching peak Figure of over 7 to 8 lacks on some days. Magnetic Ink
Character Recognition (MICR) technology was used for cheque clearance. By the end of
June 1990, they had installed 5007 Advanced Ledger Posting Machines (ALPM and 253
minicomputers at their regional and zonal offices.

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CHAPTER 2

TECHNOLOGY AND TRENDS
2.1 TECHNOLOGIES
The following are some of the common technologies used in banks. These
technologies have helped the banks in carrying their business and transactions more
easily. Communication technology has helped the bank to provide better services for their
customers. It has brought a paradigm shift in banking transaction from paper based to
electronic transaction.

2.1.1 CREDIT CARDS:
The bank credit card is a relatively recent method of payment that offers a
alternative to the cheque or gyro. Single, “All bank Credit Cards”, with machine readable
magnetic strips embedded at the reverse, containing essential customer readable magnetic
strips embedded at the reverse, containing essential customer information needs to be
introduced and encouraged for wider use. Such cards will act as conducts for canalizing
the flow of funds into the banking sector, beside; greatly reducing the pressure on the
cheque clearing system. Subsidized or free card reading equipment can be provided to
merchant establishments. Citibank SBI etc banks issue credit cards to their needy
customers.

2.1.2 AUTOMATED TELLER MACHINE (ATM):
These machines allow the customer to withdraw cash from a bank account,
borrow cash against a line of credit, make deposits, transfer money between accounts,
check on an account balance and in some cases make a loan payment. Some has been
installed in shopping malls, office buildings and major airports. It is estimated that ATMs
can perform 90% of a bank routine operations.

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Despite their sophistication, these machines are simple to use. To activate them
you insert your ATM card and then punch your Personal Identification Number (PIN) on
the keyboard. On the bank of each card there is a magnetic stripe with your PIN and bank
account numb r invisibly micro encoded. Now you simply push buttons, following the
instructions that appear on an illuminated window. If you make a mistake, the machine
will tell you and wait for you correct it. If you ask for cash, the bills drop into a tray or
drawer. To make deposit, you put money or cheque in an envelope and place it in a
drawer or slot to be credited to your account. After each withdrawal, the computer records
your new balance and it will not honor the next transaction made with the card if you are
overdrawn or have exceeded a daily limit.

2.1.3 ELECTRONIC FUND TRANSFER OF SALE (EFTPOS):
In addition to using your cash card at an ATM, you will increasingly be able to
use it to pay for purchases at retail outlets. Instead of writing a cheque, you will able to
insert your cash card into an EFTPOS terminal connected to the store's cash register.
EFTPOS terminal is a terminal at the point of sale into which an electronic debit card can
be inserted to effect a payment. The terminal will connected through the ATM or credit
card switching systems to your own bank's computer. After punching in your PIN, the
amount of the purchase will be deducted immediately from your checking deposit and
credited to the deposit of the store.
Promoters hope there will be a significant market for EFTPOS among retailers
that do not now accept credit cards. Supermarkets, for example, operate on very narrow
margins, leaving little room for the discount charged on credit card transaction. The
planned debit card network would charge merchants.

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2.1.4 COMMON NETWORKING BANKING:
A common networking for Indian bank will also help to check the growth on the
cheque volume, particularly in metropolitan centers in the wake of increased business.
The proposed network would be a co-operative network would be a co-operative network
called "BANKNET" jointly owned by the RBI and public sector banks. The private sector
and co-operative banks including Stale, Central, Urban and Land Development hanks and
financial institutions such as ICICI, IDBI. NABARDM, IFC, SFC, EXIM Bank etc. may
also be allowed to use the same network.

2.1.5 TELEBANKING:
After the introduction of facilities like ATMs to facilitate withdraw of cash
anytime, the telephoning facility, which seeks to connect account numbers to the
telephone line, is becoming popular among the bank customers.

Presently, the telephoning facility is operational in foreign banks like the ANZ
Grind lay bank and Citibank. And it is also operational in some private banks
Like HDFC, ICICI. etc., While the banks made their presence in the four Indian meters,
telephoning facility is available for Customers in Mumbai, Delhi and Chennai. Main
motive behind introducing the facility at this point of time was Citiphone Banking is a
service delivery platform, introducing for the convenience of customers Bank does not
charge anything for this service. Telebanking facility offered by Citibank uses state of
the art technology, which is being used everywhere in the word. This facility works as
under.
The customers has to up a telephone numbers which has been allotted for this
facility and the pre-recorded voice answers back with a request to key in his/her account
no. The customer is also required to dial his confidential for digit Telephone/Personal
Identification Number (T-PIN). This number is not known to anyone in the bank as it
randomly by the system at the time of printing and is stored in an encrypted format. The
security provision made for providing the service is that is impossible to access someone
else account through the unique combination of the 13 Digit account number and the 4
Digits confidential P-PIN.
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2.1.6 E-BANKING:
E - Banking is a generic name for a range of technologies that allow the exchange
of information related to banking transactions electronically. The component of E Banking are:
1. Electronic data interchange
2. Electronic fund transfer
3. Electronic mail
4. Smart card and
5. Internet/Intranet/Extranet

2.1.7 ELECTRONIC DATA INTERCHANGE (EDI):
This is an application exchange of information using a standard format to structure
the transaction of data. More precisely EDI is defined as " The transfer of structured data
for processing from computer to computer using agreed formats and protocols ". The key
difference between EDI and other forms of electronic mail and fax is that information
transferred in EDI is meant for direct use by the recipient computer. The other form of
communications are aimed at humans who read interpret and act on accordingly.
The current users of EDI in banks include automatic teller machines (ATMs)
where EDI is used for transferring and withdrawing funds between different bank
accounts.

2.1.8 ELECTRONIC MAIL:
Exchange of mail messages by way of computer system connected over
communication net working these are sent and received at the user's convenience.

2.1.9 ELECTRONIC FUND TRANSFER:
Electronic Fund Transfer is the management of cash flow and timely payments
made to parties with the use of electronic messages. EFT system involves the electronic
movement of funds and fund information between financial institutions.

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2.2.0 SMART CARD:
Smart Card is a credit sized plastic card with a computer chip embedded, capable
of storage data and allowing it is to be retrieved by a separate reader device. A Smart
Card looks like a credit card but contains a microprocessor and memory. It can be loaded
with the desired value and when used to buy something, the amount is siphoned off to the
seller's card through a reader
With smart cards you could, in theory, be walking around with your entire net
worth in a small plastic card-2.5 inches long, one and half inches wide and a half
millimeter thick.

2.2 CURRENT TRENDS
Wireless gateway

A computer (server) that transmits messages between a

server

computer network and a cellular telephone or other wireless

Website hosting

access device.
The service of providing ongoing support and monitoring of an
Internet-addressable computer that stores WebPages and

processes transactions initiated over the Internet.
Wireless Application A data transmission standard to deliver wireless markup
Protocol (WAP)

language (WML) content

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2.3 EXAMPLE
2.3.1 INTERNET BANKING UNDER ICICI BANK
COST OF OPENING AN INFINITY ACCOUNT:
Infinity is absolutely free for individual account holders. But for corporate, the
rates will be decided on a case-to-case basis.

ACCESS TO INFINITY:
The customer can have an access to ICICI Bank website at the following address
www.icicibank.com

As customer gets connected to this site, a screen similar to fig. 5.1 will be
displayed, which is shown in the page 56. This page displays the Home page of ICICI
Bank' website. From this page, customer can register online Infinity by clicking at the
'Sign up now' or 'your account for online' option. He can logon Infinity services by
clicking at the 'Login Here' option. If the customer wants to know about Infinity, he can
directly enter into Infinity web page by clicking at the Infinity' option. As customer gets
connected, Infinity page will be displayed as shown in the fig. 5.2, which is shown in the
page 57.
REGISTRATION:
Customer can register Infinity directly in the bank or through online. Clicking at
the 'Sign up now' option, he can open his resident account, or a student account (currently
available in Bombay and Manipal only), or a kid-e- account (currently available in
Bombay and Thane only), or a NRI account.

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STEPS TO OPEN ACCOUNT ONLINE:
•

Step 1: Customer has to fill the online relationship form and submit it to bank
electronically.

•

Step II: After submission of the form, customer will receive a call from the bank's
customer service representatives seeking an appointment to obtain his signature and
proof if identity as per current legal requirements.

•

Step III: The representatives will visit customer on the agreed date to complete the
formalities. Customer has to keep all requisite documents ready including a cheque
favoring ICICI Bank drawn on his earlier bank.

•

Step IV: Customer account number will be generated(subject to completion of
account opening formalities) and all the documents such as Cheques Book,

ATM card and PIN for ATM, Call Center and Infinity will sent by courier to him
within 8 days after his cheques is collected.

2.4 MARKET VIEW
How Bank Expect to sell Products
Products
2003(%)
Cash Machine
15
Shops, Supermarkets
15
Branches/broken
15
Computer
6
Internet
1
Post
4
Fax
2
Call Centers
8
TV, Mobile phones, Smart Cards
0
Others
3

CHAPTER 3

ARCHITECTURAL DESIGN
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2004(%)
16
16
33
7
10
3
1
10
2
2

3.1 ARCHITECTURE:

Client 1

Switched
Networks
, IP
Networks
,
Gateways

Access points
Pin code

Networks,
gateways,
servers

Infinity

User name and
pas
swo

Servers
Client n
Access points
Pin code

Networks,
gateways,
servers

User name and
pas
swo

FIG-3.1

STAGES OF INTERNET BANKING:
There are three stages of Internet banking. They are

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FIG-3.2

3.2 WORKING MODLE:

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3.2.1 INFORMATION SECURITY:
There are two main areas of risk that are inherent in conducting banking
transactions over the Net: preventing unauthorized transactions and maintaining integrity
of customers' transactions.
As for the First, it will generally be implied into the contract between a bank and
its customer that in the absence of any negligence on behalf of the customer the bank will
be liable for any transaction occurring on the account that have been perpetrated by fraud.
The Indian Contract Act, 1872, prevents contractual terms being enforced against a
customer that are inherently unfair or do not satisfy the test of good faith. Similar to the
English Unfair Contract Terms Act, 1977, the Indian Act provides that a partly dealing
with a consumer can't exclude or restrict its liability in respect of a breach of contract and
can't claim to be entitled to render a contractual performance subsequently different from
that which was reasonably expected or render no performance at all, except in so far as
the contract terms satisfy the requirements of 'reasonableness'.

3.2.2 INTEGRITY OF CUSTOMER’S TRANSACTION:
As for the second area-that is maintaining the integrity of customers' transactions
the risk here is that a customers transactions history or account details are accessed by a
third party. The ability of hackers to crack encryption products has been widely published
and a bank is likely to be liable under one of the following three heads

3.2.3 CONTRACTUAL LIABILITY:
In relation to the confidentiality of the customer's transactions, the banks have an
implied contractual obligation to keep their customers' affairs secret. The bank will also
be liable to its customers and other their parties who are contractually authorized to
access its network, and to read information held on it, for loss of damage to those
customers and other third parties that arise from inaccurate or faulty information held on
the network.

3.2.4 NEGLIGENT MISSTATEMENTS:
There is little case law on the point of the liability of an information service
provider for information, which is inaccurate or incomplete, and there is no legislation
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regarding liability arising from information services.

Much will depend on the

contractual relationship between the bank and its customer.
However, similar considerations in relation to the ability of banks to limit their
liability to cover the risk of unauthorized transactions apply equally in context.
It is important to note that data controllers must take into account both the harms
that might result from unauthorized processing and the nature of the data to
be protected.

3.2.5 JURISDICTION ISSUES:
In terms of legal risk management, banks may want the law of their choice to
govern their contractual relationships when conducting banking on the Internet. The
Contracts (Applicable law) Act 1990 (UK Act) will almost always uphold an express
choice of law clause in a contract. This means that a bank can specify which law governs
the contract (Provided the terms have been adequately incorporated). However, it is
crucial to remember that British banks may still have to take into account the customer
protection laws in the country in which the consumer is based.
One possible solution is to design the website on which the banking services are
accessible so that it is seen as making an invitation to treat' as compared to an offer. This
will mean that when the customer contracts the bank, the latter is free to accept or reject
the offer made by the customer. Moreover, as a customer-relations exercise, banks would
be wise to state clearly on their sites that they are not prepared to accept dealings with
consumers in certain jurisdictions.
In the debates leading up to the Cyber Bill to be presented in Parliament, the
issues of the taxation of e-commerce has focused on the taking problem of jurisdiction.
As far as Indian tax laws are concerned, corporate taxation is assessed at flat rates and
dividends distributed are included in the taxable income of shareholders. Regarding
earnings received from overseas trade, a company is taxed on the income received in
India or income earned through any business connection in India.

3.2.6 SECURITY PRODUCTS AVAILABLE:
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' The ability of banks to rely on encryption products is crucial to processing
customer's transaction safely. There are various products available, some offering a
greater level of security than others For example, the Secure Electronic Transaction
(SET) protocol offers a form of guarantee against credit card fraud. The protocol consists
of a cardholder interface resident on the customer's PC, an electronic till at the retail level
and a payment mechanism located on the bank's server, which possesses the encrypted
transaction messages.
In contract to SET, Secure Sockets Layer (SSL) technology does not offer a
guarantee against credit card fraud. However, the cost-benefits of this technology appear
to outweigh the security risks and many banks are currently trailing this technology
background, the uncertainty surrounding mandatory key escrow and the consequent
perceived lack of security provides yet another challenge for banks to consider. The out
come of the consultation process relating to the DTI's e-commerce bill will be crucial in
this regard.

SERVICES ON INTERNET BANKING:
Services of Internet Banking or what does it offer for customer? Or what all a
customer can do in Internet Banking are explained below. The services of Internet
Banking differ slightly from one bank to another. But in general they are:

1. FUNDS TRANSFER:
I-Banking makes it easy to transfer funds between any of customer accounts. even
if they are in different branches or cities and even if they are in other countries i.e.. NRI
accounts.

2. ACCOUNT INFORMATION:
•

It provides customer a summary of all his accounts (SB, RD, CC, OD,
deposits, loans) by giving details of each account, snapshots of
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balances, available credit lines, record of payments and transfers.
•

It displays account balance message and also a warning when the
account limit, as defined by customer has been crossed. This helps to
plan and monitor investments and expenses.

•

It provides account statement and transaction reports based on userdefined criteria.

•

It allows transaction details based on cheque number, transaction
amount, date and so on.

•

It allows one to view loan installment due.

3. NEW FIXED DEPOSIT REQUEST:
Customer can even open a FD account on the net. All he need to do is give details
regarding the account from which he want to transfer funds, the amount and term for
which customer would like to make the FD, the branch at which he would like to open his
FD and the relevant maturity instructions.

4. DEMAND DRAFT/BANKER'S CHEQUE REQUEST:
Customer can have a Banker's cheque or DD issued from his account. All he has
to do is select the account to be debited and give to the bank, the details of the amount,
location and beneficiary. Bank will even have the DD couriered to customer at his
mailing address (however DD will be issued only where the bank has a branch or has an
arrangement with a correspondent bank)

5. TDS INQUIRY:
Customer can access information on the Tax Deducted at Source for all his FDs
held at any of bank branches for the current or previous financial year.

6. STOP PAYMENT REQUEST:
Customer can request slop payment on a cheque or series of cheque on-line. All
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he has to do is cheque number and the reason for stopping payment.
7. CHEQUE STATUS INQUIRY:
Customer can use Internet Banking to view the status of a specific. Cheque that he
had issued on any of his accounts.

8. CHEQUE BOOK REQUEST:
Customer can request for a new cheque book on-line. His cheque book will
be couriered to the address on bankers record.
9. LEAVE AN INSTRUCTION TO BANK:
Customer can leave an instruction to bank such as 'change in FD maturity' or
'change in address' instruction.

10. COMMUNICATION WITH BANK MANAGER:
Customer can communicate wit bank manager regarding new schemes or about
any doubt.

3.3 UTILITIES
3.3.1 INFRASTRUCTURE:
The IT infrastructure Building includes a 110 port local area network (LAN)
based on Cisco Catalyst 4912 and 3524 switches with a fiber-optic, gigabit Ethernet
backbone and Category 3 and enhanced Category 5 cable runs throughout the building,
providing switched 10Mbps or 100Mbps service to all desktops.

3.3.2 WORKSTATIONS:
A general-purpose computing lab is available Seventeen 3.2 GHz Pentium 4 Dell
Optiplex GX280 PCs with Windows XP, Microsoft Office 2003, and Internet Explorer .

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3.3.3 WIDE AREA NETWORK (WAN) ACCESS:
A Xyplex N3000 router and T-1 circuit provide WAN access for services.
File and Print Services:
A single Windows 2000 domain with backup domain Controllers (BDCs) in both the
Medical Center and the Medical Education Building School of Medicine buildings
provides for authentication, file and print Services across the enterprise. A domain trust
relationship with the Windows 2000 domain of Marshall University’s main campus
provides selected access to resources throughout the university, including electronic
library subscriptions and Banner financial, student information and human resources
databases.

3.3.4 EMAIL, GROUPWARE AND COLLABORATION SERVICES:
A Microsoft Exchange Server provides electronic mail and integrated calendars
for School of Medicine faculty and staff in all facilities. The enterprise-wide integration
of email, phonebook and scheduling are provided. email accounts are provided on the
main campus mail server and are accessed via the WWW-based campus portal. Email
discussion and distribution lists are provided both through the Exchange Server and
through a PMDF Mail server list manager software on the university’s email gateway.

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CAPTER-4

APPLCATION DOMAIN
4.1 APPLICATION AREAS
4.1.1 E - BANKING:
E - Banking is a generic name for a range of technologies that allow the exchange
of information related to banking transactions electronically The component of E Banking are:
6. Electronic data interchange
7. Electronic fund transfer
8. Electronic mail
9. Smart card and
10. Internet/Intranet/Extranet

4.1.2 ELECTRONIC DATA INTERCHANGE (EDI):
This is an application exchange of information using a standard format to structure the
transaction of data. More precisely EDI is defined as " The transfer of structured data for
processing from computer to computer using agreed formats and protocols ".

4.1.3 AUTOMATIC TELLER MACHINES (ATM):
These machines allow the customer to withdraw cash from a bank account,
borrow cash against a line of credit, make deposits, transfer money between accounts,
check on an account balance and in some cases make a loan payment. Some has been
installed in shopping malls, office buildings and major airports. It is estimated that ATMs
can perform 90% of a bank routine operations.

4.1.4 ELECTRONIC MAIL:
Exchange of mail messages by way of computer system connected over
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communication net working these are sent and received at the user's convenience.

ELECTRONIC FUND TRANSFER:
Electronic Fund Transfer is the management of cash flow and timely payments
made to parties with the use of electronic messages. EFT system involves the electronic
movement of funds and fund information between financial institutions.

4.1.5 SMART CARD:
Smart Card is a credit sized plastic card with a computer chip embedded, capable
of storage data and allowing it is to be retrieved by a separate reader device. A Smart
Card looks like a credit card but contains a microprocessor and memory. It can be loaded
with the desired value and when used to buy something, the amount is siphoned off to the
seller's card through a reader.

4.1.6 INTERNET/INTRANET/EXTRANET:
Internet/Intranet/Extranet are those that use the web technologies of Graphical
Users Interface to facilitate interaction and communication.

INTERNET BANKING FOR BUISINESS PURPOSE:
It's easy to use, convenient and puts you in control. As long as you can log in to the
Internet you can manage your business banking with a few clicks of a mouse.
Bank of New Zealand's Internet Banking for Business is designed to meet the needs of
small to medium businesses, and those with accounts requiring more than one signature.
With Internet Banking for Business you enjoy flexibility, security and control.
Different registered users can have different authority levels, with an “administrator” who
can add, delete or modify users and authority levels. You can also make direct credit
payments with up to 50 payees at a time.
Some of the everyday banking functions that used to require a trip to your branch or
multiple cheques, can now be achieved instantly from any internet-linked computer, 24
hours a day, 7 days a week*.
With Internet Banking for Business you can:
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•

Access accounts where one or two signatures are required

•

Review and print account balances or specific transactions

•

Transfer funds between your Bank of New Zealand accounts

•

Make payments to New Zealand bank accounts - either for the same day or any
future date

•

Make payments to Inland Revenue such as Income Tax and GST

•

Import files for processing as one debit with multiple credits, or pay a standard list
of creditors

•

Create a reusable list of direct credits for regular payments such as payroll and
bills

•

Request new Automatic Payments, modify or delete existing ones

•

Use online forms to apply for a new cheque or deposit book and statement reprints

•

Review and print out your personal BNZ Credit Card balances, as well as a range
of other BNZ Credit Card services

•

Export your information to a financial management application

4.2 INDUSTRY RELEVANCE
The changes occurring today in the Internet banking infrastructure are poised to
have a significant impact on banking. The nature of how we use this infrastructure will
change dramatically as several key developments become widespread. These
developments include a dramatic increase in available bandwidth, the transition to the
"always on" network, the evolution of wireless Internet connectivity, and the increase in
connected devices.

4.2.1 INCREASED BANDWIDTH:
The increase in available bandwidth to the customers and the provider's will also
allow internet interactions to occur more spontaneously from any convenient location in a
synchronous mode. The ability for a provider to respond spontaneously to a request,
between seeing customer in the remote place, is a much more important and efficient
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manner of conducting these types of transactions like fund transfer, account information,
cheques book request, become vastly more desirable once this transition occurs.

4.2.2 WIRELESS CONNECTIVITY:
One of the great shifts occurring in all modes of communications is the increased
reliance on wireless connectivity. Cellular phone usage has increased enormously during
the past few years. Cell phones are displacing the permanent land based handset. In some
markets it is now less expensive to purchase cell phone usage and long distance minutes,
than traditional phone service. People who travel a great deal see this option as superior to
owning a land-based phone. The advantages of having one point of contact into the voice
network are compelling. And soon, satellite phones will increase the reach of wireless
communications and take connectivity to an even higher level: one connection to the
entire globe.

4.2.3 CONNECTED DEVICES
E-Services - Evolution of the Functional Internet
There will be concerns about the security of information exchange just as there
were during the transition to an E-commerce economy. Those concerns have not stopped
the transition. We are growing more comfortable trading stocks online, banking online
and Purchasing products online. We are growing more accustomed to looking for services
online and creating relationships with companies who only exist as virtual real estate.

CHAPTER 5

RESEARCH AND DEVELOPMENT
5.1 SCOPE:
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The scope is realized from the growing use of internet banking from three
perspectives:
1) Economic development and quality of life,
2) Customers, and
3) Banks

FOR CUSTOMERS:
•

A customer can access I-Banking with case from anywhere and at anytime in the
world.

•

It

is very

easy

to

transact

through

net.

The

screens

and

options

of

Internet Banking are so simple that a customer may not even need a manual help.
•

Net transactions take just a few minutes. Imagine the time and effort that a customer
can save.

•

A customer can pay utility bills through Internet. At present this service is not there.
But very soon within few months this facility will be provided by ICICI Bank and
HDFC Bank. With this facility, there is no burden on a customer head to pay utility
bills standing in queues.

•

I -Banking is very useful for NRI customers of Bank. A NRI customer can access
Internet transactions with less cost and he can also save his time.

FOR BANKS:
•

Through I-Banking, Banks can attract more customers.

•

Banks can also save their time.

•

Banks can build a clam environment in their branch by carrying out customers'
transaction through net.

•

Though the investment in Internet Banking is high. Banks can reduce the cost of
manpower.

•

Banks can sell products more easily through net. It was estimated that there was 9%
increase in the Internet in 2004. The following table gives a clear picture that how
banks expect to sell their product.

5.2 CONVERGENCE OF TECHNOLOGY
Internet banking technologies, the electronic transfer of information, include a number of
modalities. Telephone, radio, other voice modalities, picture phones, fax, computer real
- 24 -

time data/images, video teleconferencing (VTC), computer store and forward (enhanced
email) data/images, broadcast video, World Wide Web pages and virtual reality are
examples. Internet banking information, another inclusive term, includes banking
information from the customers.
The convergence of technology noted with the innovations such as digital
technology, fiber optics, Internet technologies and protocols, advances in computer
science and capabilities, coupled with the dramatic fall of internet costs has made internet
banking a more practical target. The hard lesson of sustainability will be learned or
programs will again fall by the hand of natural selection.

5.3 STATISTICAL SUPPORT
OCCUPATION OF RESPONDENTS:
Most of the respondents were professionals and businessman. It shows that only
well educated people use the internet banking facility. The following graph shows the
- 25 -

percentage of respondents’ occupation.

Classification of respondents on the basis of occupation
Occupation
Professionals
Businessmen
Others
Total

No. of Respondents
22
20
08
50

Percentage
44%
40%
16%
100%

TABLE-5.3.1
44%
40%

45%
40%
35%
30%
25%

16%

20%
15%
10%
5%
0%
Professionals

Businessmen

Others

No. of Respondents
FIG-5.3.1

PREFERENCE OF INTERNET BANKS:
As the Citibank has more numbers of customers in Bangalore, the majority of
respondents have Internet bank accounts in Citibank. ICICI bank follows next, then
HDFC Bank and lastly Global Trust Bank. It is clearly shown in the following chart.

- 26 -

Classification of respondents on the basis of preference of Internet banking
Preference
ICICI bank
HDFC bank
Citibank
Global Trust bank
Total

No. of Respondents
18
14
16
02
50

Percentage
36%
28%
32%
04%
100%

TABLE 5.3.2

Usage of Internet banking facility:
FIG-5.3.2
4%
32%
36%

28%

ICICI

HDFC

CITI

GLOBAL TRUST

5.4 DERIVATION OF RESULTS
USAGE OF INTERNET BANKING FACILITY:
As the Internet banking saves both time and money, customer uses the facility more
frequently. Most of respondents use it once in fortnights. The below figure shows a clear
picture about the usage of I-Banking.
Classification of respondents on the basis of usage of I-Banking

- 27 -

Usage
Once in a week
Once in 15 days
Once in a month
More frequently
Total

No. Of Respondents
06
24
14
06
50

Percentage
12%
48%
28%
12%
100%

TABLE 5.4.1

48%
50%
45%
40%

28%

35%
30%
25%
20%
15%

12%

12%

10%
5%
0%
Once in a week

Once in 15 days

Once in a month

More frequently

No. of Respondents
FIG-5.4.1

The list of Indian Internet banking subscribers, citywide Internet subscribers and
web market estimation are shown in the following table.

- 28 -

Indian Internet banking Subscriber Forecast

TABLE 5.4.2

CHAPTER-6

CONCLUSION
- 29 -

6.1 CONCLUSION
At the end it is very essential that overall study and findings must be concluded in
a compact way. The main aim of this investigation has been to study the Internet
Banking, its awareness and to collect the opinion of users and banks' staffs about it.
The statistical data obtained about Internet usage showed that its usage has
increased substantially over the years and many banks are migrating to the World Wide
Web.
Internet Banking has great significance and is gradually replacing the Traditional
Banking. The benefits accrued from Internet Banking for both banks and customers have
been highlighted in this report. It is very helpful to NRI customer as he can access it
anywhere in the world. A customer can be more benefited if he owns both ATM card and
Internet Bank account with regard to Indian context. Either he can make deposit or
withdraw money directly through ATM card in cash points or make funds transfer
electronically through Internet.
At the heart of all this is a revolutionary assumption: banking is no longer about
money. Then what is it about? Way back in the 1960s. Citibank's then Chairman Walter
Wrist on had said that the basic commodity in banking is information, and not money. In
our time, Microsoft's Bill Gates has made a similar observation. "Data about customer
relationship and credit analysis are at the heart of the (banking) business", he says in his
book 'Business @ Speed of Thought'.
If banks are redefined as organizations, which crunch information, then they just cannot
do without the Internet. That is what the Internet Banking revolution is ultimately all
about.

6.2 FEATURES OF TECHNOLOGY
•

Fast transfers - usually within 3 working days.

•

Attractive £££ to rupee exchange rates.

•

Make money transfers and get exchange rate quotes over the phone.

•

Ability to nominate a person living in India to have access to your
account.
- 30 -

•

Fee free money transfers to India between your nominated and eligible
customer current account and your ICICI bank NRE savings account via
bill payment.

•

IP mobile & wireless.

•

Multi domain network management.

BIBLIOGRAPHY

WEB SITES VISITED:

http://www.google.com
- 31 -

http://www.icicibank.com
http://www.howstuffsworks.com
http://www.hdfcbank.com

- 32 -

Internet Banking

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