A SUMMER TRAINING PROJECT REPORTON

STUDY ON CUSTOMER PERCEPTION TOWARDS E-BANKING SERVICESBY

UNDER THE GUIDANCE OF: PROF. ANU SINGH LATHER DEAN, USMS

SUBMITTED BY-

NEHA SINGH MBA (2008-2010) 0041663908

University School of Management Studies

1

DECLARATIONI hereby declare that the dissertation STUDY OF CONSUMER PERCEPTION TOWARDS E-BANKING SERVICES PROVIDED BY ICICI BANK Submitted for the MBA Degree at University School Of Management studies, Indraprastha University is my original work and the dissertation has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.

Neha Singh MBA 3rd Semester (0041663908)

2

CERTIFICATE OF COMPANY

3

CERTIFICATEThis is to certify that Ms Neha Singh(0041663908), a student of Post Graduate Degree in Masters of Business Administration, USMS GGSIP University, Delhi has worked for the project on A STUDY OF CONSUMER PERCEPTION TOWARDS E-BANKING SERVICES PROVIDED BY ICICI under the able guidance & supervision of Prof. Anu Singh Lather, Dean USMS, GGSIP University, Delhi. This Project report is based on the information gathered during the course of Summer Internship and is of requisite standard for the partial fulfilment of the Post Graduate degree in Masters of Business Administration. To the best of our knowledge no part of this report has been reproduced from any other source.

(Prof. Anu Singh Lather) Dean, USMS

4

ACKNOWLEDGEMENTAcknowledgement is an art, one can write glib stanzas without meaning a word, on the other hand one can make a simple expression of gratitude. Industrial training is an integral part of any Master of Business Administration program and for that purposes I had joined a bank what else can be as good as ICICI Bank, India's one of the leading private bank. I take the opportunity to express my gratitude to all of them who in some or other way helped me to accomplish this challenging project in ICICI Bank. No amount of written expression is sufficient to show my deepest sense of gratitude to them. I am very thankful to industrial Guide, Mr. Piyush Makol, Sales Manager and very grateful to my faculty guide Prof. Anu Singh Lather for their everlasting support and guidance on the ground of which I have acquired a new field of knowledge. The course structure created for this curriculum has benefited with the inclusion of recent development in the organizational and managerial aspects. Lastly, I am thankful to all the members of ICICI bank, which has given me valuable information in the part of my project.

NEHA SINGH5

MBA ROLL NO. 0041663908

EXECUTIVE SUMMARYTitle of the project: Study Customer Perception towards E-Banking services by ICICI Bank. Objectives: Working of the E-Banking system SWOT Analysis of ICICI Bank To determine the awareness of e-banking customers. To identify the factors which influence the E-Banking. To find out the effectiveness of e-banking services. To study the level of satisfaction of e-banking user Research Methodology: Research included gathering both Primary and Secondary data. Primary data in the study most of the data have been collected through questionnaire. Secondary data has been taken from internet, newspaper, magazines and companies web sites. Data Collection: Primary data collected through ATM and Bank Survey

6

Action Plan: First and foremost, accumulating information from newspapers (Economic Times, Times of India), Journals, Magazines and Internet. Secondly, taking a sample size (about 100) and doing a market survey by filling up questionnaires from customers to find out what is the customer perception about the features and services provided by ICICI Bank. Also taking into consideration their attitude, preferences and suggestions. Thirdly, analyzing the data collected. Critical analysis of consumer perception their choice and preferences. Eventually, deciding on the awareness of customers towards the services provided by the Bank, the sense of security felt by them while using these services and the effectiveness of the Services.

TABLE OF CONTENTSDECLARATION...1 COMPANY CERTIFICATE...2 COLLEGE CERTIFICATE3 ACKNOWLEDGEMENT........................................................................4 EXECUTIVE SUMMARY.......................................................................5 Introduction ...................................................................6 Advantages of Banking .............................................................................................8 Mobile .8 Tele .8 Email ...9 Automated Teller 9 EBanking Banking Banking Machine 7

Electronic Data Interchange 10 Credit/Debit Cards ..10 Growth of E Banking ..11 Features of E Banking .11

Research Methodology............................................................................13 Company Profile..14 About ICICI Bank ..14 Vision. ..15 Overview .16 History .17 Domestic Subsidiaries .18 Board Members ...19 Products and Services .20 Awards and Recognition 20 What makes ICICI different from other Banks ..23 SWOT Analysis ...24

Literature Review...................................................................................25 Data Analysis and Interpretation...........................................30 Limitations ..40 Conclusions ............................................................................................41 Recommendation ...42 References ...........43

8

INTRODUCTION

DEFINITION OF E - BANKING 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 or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet. Customers access e-banking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are similar for the various e-banking access channels, this booklet focuses specifically on Internet-based services due to the Internets widely accessible public network. The term "electronic banking" or "e-banking" covers both computer and telephone banking. Using computer banking, a charitys computer either dials directly into its bank's computer or gains access to the banks computer over the internet. Using telephone banking, the charity controls its bank accounts by giving the bank instructions over the telephone. Both computer and telephone banking involve the use of passwords which give access to the charitys accounts.The following terms all refer to one form or another of electronic banking: personal computer (PC) banking, Internet banking, virtual banking, online banking, home banking, remote electronic banking, and phone banking. PC banking and Internet or online banking are the most frequently used designations. It should be noted, however, that the terms used to describe the various types of electronic banking are often used interchangeably. PC banking is a form of online banking that enables customers to execute bank transactions from a PC via a modem. In most PC banking ventures, the bank offers the customer a proprietary financial software program that allows the9

customer to perform financial transactions from his or her home computer. The customer then dials into the bank with his or her modem, downloads data, and runs the programs that are resident on the customer's computer. Currently, many banks offer PC banking systems that allow customers to obtain account balances and credit card statements, pay bills, and transfer funds between accounts. Internet banking, sometimes called online banking, is an outgrowth of PC banking. Internet banking uses the Internet as the delivery channel by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and savings account balances, paying mortgages, and purchasing financial instruments and certificates of deposit. An Internet banking customer accesses his or her accounts from a browser- software that runs Internet banking programs resident on the bank's World Wide Web server, not on the user's PC. NetBanker defines a " true Internet bank" as one that provides account balances and some transactional capabilities to retail customers over the World Wide Web. Internet banks are also known as virtual, cyber, net, interactive, or web banks. To date, more banks have established an advertising presence on the Internetprimarily in the form of informational or interactive web sites-than have created transactional web sites. However, a number of Banks that do not yet offer transactional Internet banking services have indicated on their web sites that they will offer such banking activities in the future.Internet banks generally have lower operational and transactional costs than do traditional brick-and-mortar banks, they are often able to offer low-cost checking and high-yield Certificates of deposit. Internet banking is not limited to a physical site; some Internet banks exist without physical branches, for example, Telebank (Arlington, Virginia) and Banknet (UK). Further, in some cases, web banks are not restricted to conducting transactions within national borders and have the ability to make transactions involving large amounts of assets instantaneously. According to industry analysts, electronic banking provides a variety of attractive possibilities for remote account access, including:10

Availability of inquiry and transaction services around the clock; Worldwide connectivity; Easy access to transaction data, both recent and historical; and "Direct customer control of international movement of funds without intermediation of financial institutions in customer's jurisdiction."

Advantages Of E-Banking

Bank availability 24h, 7 days a week, 365 days a year No time limit access into account Immediate realization of payment operation orders Advance value date fixing when sending orders Monitoring account balance in different time periods No additional commission for executed payment operations.

The E-Banking services include not only internet banking but also the following:

Mobile Banking: Mobile phone banking takes banking one step ahead of Internet banking. One can do banking without even making a phone call. Mobile banking works through a set of text messages. Customer should first register for the facility and then can use either SMS or WAP in case he/she subscribes to any of the various carriers. Presently two types of services are available through mobile phone viz. Alert Services and Requests. This service really offers Any time anywhere banking. However, the Bank should have tie-up arrangement with the cellular service provider. A pre-designated mobile number should be available at the Bank. A user Manual needs to be provided to the customer to acquaint him with11

Banks specific codes and menus. In case of loss/theft of mobile, the customer is required to inform the Bank immediately to deactivate or disable mobile banking service. Tele-Banking Phone banking or Telebanking is a banking service offered by banks to enable customers to access their account for information or transaction. Similar to the ATM pin a telephone pin(T-PIN) is provided to each account holder. The Customer can call the exclusive telephone numbers and provide the details to identify himself or herself to the automated voice. Typically, the bank account number and the T-PIN are asked for. The customer is given access to his account or transact on his account when the respective number matches the computerized system. Though cash withdrawal and deposit are not enabled through this service, many banks offer cash delivery or collection service to certain classes of customers.

E Mail Banking: The most common and basic use of Internet is the exchange of e-mail (electronic mail). It is an extremely powerful and revolutionary result of Internet, which has facilitated almost instantaneous communication with people in any part of the globe. Using Email Banking service, all transaction information such as: transferring fund, depositing, withdrawing, account balance, transaction date and time, etc...shall be immediately alerted to the customers email account. So one need not worry about the status of his transactions. This service is mostly provided free of charge. All that a customer need to do is sign up for email banking services and get detailed account statement by e-mail on daily/weekly/fortnightly/monthly basis in various formats via e-mail. , Some other information that banks sends with the account statement are: saving interest rates, foreign exchange, new products and services, banks promotion campaigns and all operating hot news.12

Automated Teller Machines (ATMs): Automated Teller Machine (ATM) is a self-service terminal system. ATM as the name indicates is a very user-friendly machine that can render 24-hour services to help the bank customer perform basic bank transactions like depositing cash or cheques and withdrawing money. It is an extension of Anywhere, anytime concept of banking. When an ATM is connected to an online branch network, it can additionally provide services such as balance enquiries, transfer of funds between the accounts, etc.

Electronic Data Interchange (EDI): EDI is a transmission in a standard syntax of the unambiguous information of business for strategic significance between computers of the independent organizations. It minimizes human intervention or rekeying. The sending organization only has to send sufficient data to allow the receiving organization to perform a specific function (process a business transaction). There is no need to send repetitive input of senders address, operational instructions, authorized signatories which would already in the receivers computer database. There are 3 components of EDI, a generally accepted business format called EDI standards, translation capability i.e. ensured through EDI software and a mail service called Value Added Network (VAN). The VAN acts as an electronic post office from where the messages are routed/picked up at regular intervals facilitating data inter-change between large numbers of organizations and keep the cost of network resources to the minimum.

Credit Cards:

13

The credit cards can be defined as a small plastic card that allows its holders to buy goods and services on credit card issuing agency. The credit card releases the customers from bothering of carrying cash and ensures safety. We can say that credit card is a passport to safety, convenience, prestige and credit. Now a days credit card may also be used for the purpose of obtaining cash from the branches of issuing bank or branches of certain other banks with which arrangements have been made. Some institutions make a specific annual charge to their card holders. Debit Cards: Debit cards will offer direct withdrawal of funds from a customers bank account. The spending limit is determined by the users bank depending upon available balance in the account of the user. It is a special plastic card connected with electromagnetic identification that one can use to pay for things purchased directly from its bank account. Under this system cardholders accounts are immediately debited against purchase or services to the computer network. Hence, under debit card the card holder must have adequate balance in his account. This system is intended to replace cheque system of payment. Debit card issuance by the bank in India should be approved by the respective banks board as well as by RBI. These can be issued only for customers maintaining satisfactory accounts and for a minimum period of six months. Growth of E-banking:12345Competition Cost efficiencies. Geographical reach. Branding. Customer demographics.

Features of E-banking are:14

1. It removes the traditional geographical barriers as it could reach out to customers of different countries / legal jurisdiction. This has raised the question of jurisdiction of law / supervisory system to which such transactions should be subjected, 2. It has added a new dimension to different kinds of risks traditionally associated with banking, heightening some of them and throwing new risk control challenges, 3. Security of banking transactions, validity of electronic contract, customers privacy, etc., which have all along been concerns of both bankers and supervisors have assumed different dimensions given that Internet is a public domain, not subject to control by any single authority or group of users, 4. It poses a strategic risk of loss of business to those banks who do not respond in time, to this new technology, being the efficient and cost effective delivery mechanism of banking services, 5. A new form of competition has emerged both from the existing players and new players of the market who are not strictly banks.

15

RESEARCH METHODOLOGYA systematic design, collection, analysis and reporting of data and finding relevant to a specific marketing situation or problem is an important aspect of any relevant study. The objective of this chapter is to describe the research procedure and methods that has been adopted for the successful completion of the project. RESERCH DESIGN:- The research approach used survey method which is a widely used method for data collection and best suited for exploratory type of research survey includes research instrument like questionnaire which can be structured and unstructured.. DATA DESIGN :- The data design involves different aspects like the nature of the data, the data sources and the tools used for the analysis of data.

16

SOURES OF DATA:- Research included gathering both Primary and Secondary data. Primary data in the study most of the data have been collected through questionnaire. Secondary data has been taken from internet, newspaper, magazines and companies web sites. SAMPLING TECHNIQUE:- The study has been based on convenient sampling. The population has been taken on the basis of age, gender and income DATA COMPLETION AND ANALYSIS:- After the data has been collected, it was tabulated and findings of the project were presented followed by analysis and interpretation to reach certain conclusions. DATA COLLECTION:- Keeping in mind the objectives of the study, the primary data has been collected from a sample of 100 respondents belonging to DELHI. SCOPE OF STUDY:- The whole project is based on To study the Customer perception of e-banking services provided by ICICI bank and data has been taken in Delhi.

COMPANY PROFILE

ABOUT ICICIICICI Bank is India's second largest bank with consolidated total assets of over Rs. 484,000 cores and net worth of over Rs. 47,000 cores. It made a profit after tax of Rs. 4,158 corer in FY2008. ICICI Bank began its life 1994 as a wholly-owned subsidiary of ICICI Limited, an Indian financial institution, whose shareholding in the bank was reduced to 46 per cent through a public17

offering of shares in India in 1997-98, an equity offering in the form of ADRs listed on the NYSE in fiscal 1999-2000, the ICICI Bank's acquisition of Bank of Madura in fiscal 2000-01, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. In 2002, ICICI was merged with ICICI Bank to combine the wholesale and retail operations of both organizations into a single entity. (ICICI, or the Industrial Credit and Investment Corporation of India was formed in 1955 as a development financial institution at the initiative of the World Bank, the Indian government and representatives of Indian industry.) ICICI Bank's shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India Limited in India and its ADRs are listed on the New York Stock Exchange.

Vision of ICICI Bank

18

19

OVERVIEW ICICI Group offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized group companies, subsidiaries and affiliates in the areas of personal banking, investment banking, life and general insurance, venture capital and asset management. With a strong customer focus, the ICICI Group Companies have maintained and enhanced their leadership position in their respective sectors. ICICI Prudential Life Insurance Company is a 74:26 joint venture with Prudential plc (UK). It is the largest private sector life insurance company offering a comprehensive suite of life, health and pensions products. It is also the pioneer in launching innovative health care products like Diabetes Care and Cancer Care. The company operates on a multi-channel platform and has a distribution strength of over 2,90,000 financial advisors operating from 1956 branches spread across 1669 locations across the country. In addition to the agency force, it also has tie-ups with various banks, corporate agents and brokers. In fiscal 2008, ICICI Prudential attained a market share of 12.7% with new business weighted premium growth of 68.3% to Rs. 66.84 billion and held assets of Rs. 285.78 billion at March 31 ,2008. ICICI Lombard General Insurance Company, a joint venture with the Canada based Fairfax Financial Holdings, is the largest private sector general insurance company. It has a comprehensive product portfolio catering to all corporate and retail insurance needs and is present in over 200 locations across the country. ICICI Lombard General Insurance has achieved a market share of 29.8% among private sector general insurance companies and an overall market share of 11.9% during fiscal 2008. The gross return premium grew by 11.4% from Rs. 30.3 billion in fiscal 2007 to Rs. 33.45 billion in fiscal 2008. ICICI Securities Ltd is the largest equity house in the country providing endto-end solutions (including web-based services) through the largest nonbanking distribution channel so as to fulfill all the diverse needs of retail and20

corporate customers. ICICI Securities (I-Sec) has a dominant position in its core segments of its operations - Corporate Finance including Equity Capital Markets Advisory Services, Institutional Equities, Retail and Financial Product Distribution. ICICI Prudential Asset Management is the second largest mutual fund with asset under management of Rs. 547.74 billion and a market share of 10.2% as on March 31, 2008. The Company manages a comprehensive range of mutual fund schemes and portfolio management services to meet the varying investment needs of its investors through 235 branches spread across . HISTORY OF ICICI

1955 The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated at the initiative of World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. 1994 ICICI established Banking Corporation as a banking subsidiary.formerly Industrial Credit and Investment Corporation of India. Later, ICICI Banking Corporation was renamed as 'ICICI Bank Limited'. ICICI founded a separate legal entity, ICICI Bank, to undertake normal banking operations - taking deposits, credit cards, car loans etc. 2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s. 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse merger of ICICI, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory approvals, ICICI integrated the group's financing and banking operations, both wholesale and retail, into a single entity.

21

Also in 2002, ICICI Bank bought the Shimla and Darjeeling branches that Standard Chartered Bank had inherited when it acquired Grindlays Bank. ICICI started its international expansion by opening representative offices in New York and London.

2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and Shanghai.

2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between that country, India and South Africa. 2005 ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in assets, head office in Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also, ICICI established a branch in Dubai International Financial Centre and in Hong Kong.

2006 ICICI Bank UK opened a branch in Antwerp, in Belgium. ICICI opened representative offices in Bangkok, Jakarta, and Kuala Lumpur. 2007 ICICI amalgamated Sangli Bank, which was headquartered in Sangli, in Maharashtra State, and which had 158 branches in Maharashtra and another 31 in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in rural areas. ICICI also received permission from the government of Qatar to open a branch in Doha. ICICI Bank Eurasia opened a second branch, this time in St. Petersburg.

2008 The US Federal Reserve permitted ICICI to convert its representative office in New York into a branch.22

Domestic subsidiariesICICI Brokerage Services Limited * ICICI Distribution Finance Private Limited ICICI Home Finance Company Limited ICICI Investment Management Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Trusteeship Services Limited ICICI Venture Funds Management Company Limited Prudential ICICI Asset Management Company Limited Prudential ICICI Trust Limited

Board Members Mr. K. V. Kamath, Chairman Mr. Sridar Iyengar Mr. Lakshmi N. Mittal Mr. Narendra Murkumbi Dr. Anup K. Pujari Mr. Anupam Puri Mr. M.S. Ramachandran Mr. M.K. Sharma Mr. P.M. Sinha Prof. Marti G. Subrahmanyam Mr. T.S. Vijaya Mr. V. Prem Watsa Ms. Chanda D. Kochhar, Managing Director & CEO23

Mr. Sandeep Bakhshi, Deputy Managing Director Mr. N. S. Kannan, Executive Director & CFO Mr. K. Ramkumar, Executive Director Mr. Sonjoy Chatterjee, Executive Director

Product and ServicesICICI Bank is the one stop shop for all year forex needs: Deposit Products: Saving Account Fixed Deposit Easy receive Account Loans: Cards: Debit Cards Credit Cards Travel Cards Insurance Products: Car Insurance 2 wheeler Insurance Home Loans Personal Loans Car Loans Commercial vehicle Loans

24

AWARDS & RECOGNITIONS (2009)

For the third year in a row ICICI Bank has won The Asset Triple A Country Awards for Best Domestic Bank in India. ICICI Bank won the Most Admired Knowledge Enterprises (MAKE) India 2009 Award. ICICI Bank won the first place in "Maximizing Enterprise Intellectual Capital" category, October 28, 2009 Ms Chanda Kochhar, MD and CEO was awarded with the Indian Business Women Leadership Award at NDTV Profit Business Leadership Awards , October 26, 2009. ICICI Bank received two awards in CNBC Awaaz Consumer Awards; one for the most preferred auto loan and the other for most preferred credit Card, on September 30, 2009 Ms. Chanda Kochhar, Managing Director & CEO ranked in the top 20 of the World's 100 Most Powerful Women list compiled by Forbes, August 2009 Financial Express at its FE India's Best Banks Awards, honoured Mr. K.V. Kamath, Chairman with the Lifetime Achievement Award , July 25, 2009 ICICI Bank won Asset Triple A Investment Awards for the Best Derivative House, India. In addition ICICI Bank were Highly commended , Local Currency Structured product, India for 1.5 year ADR GDR linked Range Accrual Note., July 2009 ICICI bank won in three categories at World finance Banking awards on June 16, 2009 Best NRI Services bank Excellence in Private Banking, APAC Region Excellence in Remittance Business, APAC Region ICICI Bank Mobile Banking was adjudged "Best Bank Award for Initiatives in Mobile Payments and Banking" by IDRBT, on May 18, 2009 in Hyderabad.25

ICICI Bank's b2 branchfree banking was adjudged "Best E-Banking Project Implementation Award 2008" by The Asian Banker, on May 11, 2009 at the China World Hotel in Beijing. ICICI Bank bags the Best bank in SME financing (Private Sector) at the Dun & Bradstreet Banking awards 2009. ICICI Bank NRI services wins the Excellence in Business Model Innovation Award in the eighth Asian Banker Excellence in Retail Financial Services Awards Programme. ICICI Bank's Rural Micro Banking and Agri-Business Group wins WOW Event & Experiential Marketing Award in two categories - Rural Marketing programme of the year and Small Budget On Ground Promotion of the Year. These awards were given for Cattle Loan 'Kamdhenu Campaign' and 'Talkies on the move campaign' respectively. ICICI Bank's Germany Branch has been certified by Stiftung Warrentest. ICICI Bank is ranked 2nd amongst 57 savings products across 19 banks ICICI Bank Germany won the yearly banking test of the investor magazine uro in the call moneycategory. The ICICI Bank was awarded the runner's up position in Gartner Business Intelligence and Excellence Award for Asia Pacific for its Business Intelligence functions. ICICI Bank's Organisational Excellence Group was recently awarded ISO 9001:2008 certification by TUV Nord. The scope of certification comprised processes around consulting and capability building on methods of quality & improvements. ICICI Bank has been awarded the following titles under The Asset Triple A Country Awards for 2009: Best Transaction Bank in India Best Trade Finance Bank in India Best Cash Management Bank in India Best Domestic Custodian in India ICICI Bank has bagged the Best Cash Management Bank in India award26

for the second year in a row. The other awards have been bagged for the third year in a row. ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the Canadian Helen Keller Centre's Fifth Annual Luncheon in Toronto. The award was given to ICICI Bank its long-standing support to this unique training centre for people who are deaf-blind.

What makes ICICI different from other banks?ICICI is one of the leading private sector banks in India, which combines financial strength with a reputation for innovation and a universal culture that embraces change. On March 31, 2002 ICICI formally merged with ICICI bank and emerged as India's first Universal Bank. ICICI bank offers a wide spectrum of domestic and international banking services to facilitate trade, investment, cross border business, treasury and foreign exchange services. ICICI bank has been quick to realize that Ebanking has changed from a somewhat experimental delivery vehicle into an increasingly mainstream one for delivery of broad spectrum of banking products and services. Basic E- banking services are rapidly changing from competitive differentiator to competitive necessity. The group has leveraged on a number of tie-ups to come up with its various offering: For its Internet banking offering the ICICI bank uses Infinity from Infosys, For its credit card business its uses Vision Plus from Pay Sys, USA, For WAP services the banks has tie-up with cellular service providers Orange and Airtel.

27

The Bank has been offering phone banking free of charge and was first to launch an Internet Banking service in the country named Infinity. Infinity now provides a host of online banking solutions to retail as well as corporate customers. ICICI's constant endeavor in providing more value to the customers has resulted in Infinity being the front-runner amongst online banking offerings in the country. Also, in keeping with the customers need for increased security, Corporate Infinity now provides multiple levels of authentication besides user ID/ password and includes security tokens. ICICI provides custom tailored solution that can support even the most complex business strategy. ICICI is now moving all its operations into the era of 'virtual integration'. Not only has this drastically reduced costs, but it has also increased and improved its services to customers.

SWOT ANALYSIS

28

29

The table below gives the SWOT analysis of ICICI. SWOT ANALYSIS OF ICICI Strengths & Opportunities Advanced Technology Providing innovative products & Services First mover advantages Add value to the shareholders Weaknesses & Threats Higher capital base High cost of funds Leverage technology to satisfy customer demands. Too many subsidiaries Competition within the industry.

Thus, ICICI has been able to use technology to provide value-added service to its customers during the last few years. For ICICI, technology is an integral part of their business. However, their overall progress could have been smoother but for certain internal and extraneous factors and also a pressure on spread due to a competitive market. (Annual report, 200607).

30

LITERATURE REVIEWEngland (1998) conducted the first important study that estimated the number of U.S. banks offering Internet banking and analyzed the structure and performance characteristics of these banks. They have found no evidence of major differences in the performance of the group of banks offering Internet banking activities compared to those. That Ddo not offer such services Furst et. al. (1998) a U.S. based study found out a significant shift by consumers and businesses to electronic payments. In response to developments in lectronic payments and remote banking, banks have greatly increased their investment in technology, particularly in retail banking. The gains from technological advancements in banking and payments are likely to be substantial, both from the point of view of individual financial institutions and economy-wide. In this environment, banks should review and, if necessary, adjust their risk management practices in tandem with upgrading their technology activities. Furst et. al. (2000) presented data on the number of national

banks in U.S. offering Internet banking and the products and services being offered. Only 20 percent of national banks offered Internet banking in the third quarter of 1999. However, as a group, these Internet banks accounted for almost 90 percent of national banking system assets, Banks in all size categories??and 84 percent of small deposit accounts. offering Internet banking tend to rely less on interest-yielding activities and core deposits than do non-Internet banks. Also, Institutions with Internet banking outperformed nonInternet banks Guru et. al. (2000) examined the various electronic channels

utilized by the local Malaysian banks and also accessed the consumers reactions to these delivery channels. It was found that Internet banking was nearly absent in Malaysian banks due to lack of adequate legal framework and security concerns. However31

over 60 percent of the respondents were having Internet access at home and thus represented a positive indication for PC based.

DeYoung (2001a) investigated the performance of Internet-only banks and thrifts in the U.S. The empirical analysis found that the newly chartered Internet-only banks substantially under perform the established banks at first, but these performance gaps systematically diminish over time as new banks grow older and larger. The study suggested that the Internet-only banking model may be feasible when well executed and efficiently.

DeYoung (2001b) found that the average one year old Internet-

only bank earned significantly lower profits than the average one year old branching bank, due to low business volumes and high non-interest expenses. It supports the proposition regarding the Internet-only banks, fast growth but low. Jasimuddin (2001) found that within one year of the introduction

of Internet service in Saudi Arabia, Saudi banks had at least decided on their Internet presence. 73% of the Saudi banks possessed their own web sites and 25% of the web sites were offering full services over Internet. The banks viewed the Internet as a key alternative delivery channel. Suganthi et. al. (2001) conducted the review of Malaysian

banking sites and revealed that all domestic banks were having a web presence. Only 4 of the ten major banks were with transactional sites. The remaining sites were at informational level. There are various psychological and behavioral issues as trust, security of Internet transactions, reluctance to change and preference for human interface which appear to impedent the growth of internet banking.

32

Furst et. al. (2002) provided a comparative study of Internet and

non-Internet banks in U.S. and found that institutions with Internet banking outperformed non-Internet banks in profitability. Also, banks in all categories of size offering Internet banking tended to rely less on interest yielding activities and deposits nonInternet banks do. Koedrabruen et. al. (2002) investigated, designed and developed

an Internet based retail banking prototype that meets the requirements of the Thai customers. It found that more than half of the sample Internet users in Thailand are very interested in using the Internet banking services. The main features needed are balance inquiry, bill payment, fund transfer, business information, and payment for goods purchased. The prototype was then developed and validated. The survey from the executives of four Thai banks revealed that there was a potential growth for retail Internet banking in Thailand. Corrocher (2002) investigated the determinants of the adoption of

Internet technology for the provision of banking services in the Italian context and also studied the relationship between the Internet banking and the traditional banking activity, in order to understand if these two systems of financial services delivery are perceived as substitutes or complements by the banks. From the results of the empirical analysis, banks seem to perceive Internet banking as a substitute for the existing branching structure, although there is also some evidence that banks providing innovative financial services are more inclined to adopt the innovation than traditional bank.

Hassan (2002) found that online home banking has emerged as a

significant strategy for banks to attract customers. Almost 7533

percent of the Italian banks have adopted some form of Internet banking during the period 1993-2000. It also found that the higher likelihood of adopting active Internet banking activities is by larger banks, banks with higher involvement in off-balance sheet activities, past performance and higher branching network. Janice et. al. (2002) based on interviews with four banks in Hong

Kong noted that banks view the Internet as being a supplementary distribution channel for their products and services in addition to other forms of distribution channels such as Automated Teller Machines (ATMs), phones, mobile phones and bank branches. Basic transactions and securities trading are the most popular types of operations that customers carry out in Internet banking. Lustsik (2003) based on the survey of experts of e-banking in

Estonian banks found that Estonia has achieved significant success in implementation of e-banking and also on the top of the list in emerging countries. All the major banks are developing ebusiness as one of the core strategies for futuredevelopment. Agarwal et. al. (2003) explored the role of e-banking in e-

democracy. With the development of asynchronous technologies and secured electronic transaction technologies, more banks and departments were using Internet for transactional and information medium. Initiatives such as E-SEVA and FSCs are the milestones towards achieving comprehensive e-governance.

Guinaliu (2004) The purpose of this paper is to put forward a descriptive model that characterizes customer loyalty in the context of electronic banking. Owing to the high costs involved in increasing the current client base, one of the main goals of banks and other financial services providers that operate through the internet should be to develop customer loyalty in order. The paper analyzes the loyalty development34

process in the e-banking context. The data were collected through a web survey using Spanish-speaking subjects. The contrasts of the research model and measurement validation were based on exploratory analyses and structural equations models.

DATA ANALYSIS AND INTERPRETATIONThe data analysis and interpretation has been done accordingly question wise. So the data has been analyzed by using the graphs and charts are prepared with the help of excel for that case. Thus charts have shown the results obtained from the developed questionnaire. The interpretation has been done as follows:1) Do you have an account with ICICI bank? Yes No 80% 20%

35

INTERPRETATION:According to the survey done through through questionnaitre and as wll as with the help of internet and personnel interview.It was analysed that the 80% of the people are having an account with ICICI bank for the pyrpose of using the E-banking services available with the bank and rest of them are not at having account with the ICICI Bank. Q.2) For how long have you been accessing ICICI bank services?

Less than 1 year 1-3 year 3-5 year More than 5 year

43% 25% 19% 13%

36

INTERPRETATION:According to the survey done through through questionnaitre and as wll as with the help of internet and personnel interview.It was analysed that the 43% says less than 1 year,25%says 1-3 yr.19%says it will be between 3-5 yr.and 13% says it could be more than 5 years.

3) Are you aware about e-banking services provided by ICICI bank.

Yes No

60% 40%37

INTERPRETATION:According to the survey done through through questionnaitre,I was found that 60% are aware about the E-banking services and 40% says that they are not aware about this service of bank.

4) Are you often using the service of ICICI bank.

38

Yes No

55% 45%

INTERPRETATION:Through questionnaire it was found that 55% people are using the service of the ICICI Bank and on the other hand 45% people says no,that we are not using the service of this bank.

5)

While opening up account were you aware of e-banking services provided by ICICI bank.39

Fully aware Had an rough idea No

15% 35% 50%

INTERPRETATION:Through questionnaire it was found that 15% people are aware about the service of the ICICI Bank,35% said they were having an rough idea about this service of the bank on the other hand 50% people says no,that we are not aware about the service of this bank.

40

6) If answer is (c), how did you get to know about internet banking services of your bank.

Personal visit Executive from the bank Friends/ Relative Advertisements

23% 25% 32% 20%

INTERPRETATION: According to the survey done through through questionnaitre and as wll as with the help of internet and personnel interview it was found that 23% peoples are get to know about e-banking services of their bank through41

personnel vosit,25% says they get to know about from executive of the bank.32% get to know from their relatives and friends and 20% people are get to know through advertisement only. 7) If answer is( a or b), which of the following internet banking services you are using.

Transfer funds b/w account View a/c balance and Deposit ATM facility Credit fix deposit online

15% 30% 45% 10%

INTERPRETATION: It was analysed through questionnaire that 15% said that they are using transfer funds b/w account facility of the internet banking service,30% using view a/c balance and deposit facility,45% says they are using ATM facility and 10% said that they are using credit fix deposit online facility provided by the internet banking services.

42

8) Have you ever used online net banking facility provided by ICICI bank.

Yes No

70% 30%

INTERPRETATION:

43

Through questionnaire it was found that 70% people are said that yes that they are using online net banking facilities provided by ICICI bank and on the other hand 30% people said that they are not using it.

9) Are you satisfy with the e-banking services provided by the bank.

Strongly agree Agree Neutral Disagree Strongly disagree

35% 25% 15% 10% 5%

44

INTERPRETATION: According to the survey done through through questionnaitre and as wll as with the help of internet and personnel interview.It was analysed that that he 35% says they are strongly agree for the services provided by E banking , 25% says that they are agree,15% says that neutral and 10% said they are disagree and 5% are strongly dis agree for the services provided by E banking in ICICI bank.

10) Which of the following benefit you get while using e-banking services.

Time saving Economical Easy processing Easy funds transfer

50% 15% 15% 20%

45

INTERPRETATION: It was found through questionnaire that the benefit are getting by the peoples while using e-banking services are as follows:50% says it is time saving and 15% says it is economical,and again 15%said that it is easy processing and 20% said that its is for easy fund transfer requirements.

11) Do you feel secure using these services?a) Yes b) No

-

84% 16%46

Interpretation: It shows that majority of the people have trust on these services and prefer continuing them. But some still feel insecure.

12) How many times have you experienced service failure? Frequently Occasionally 3% 57%47

Never

-

40%

Interpretation: Even though these services are widely used, people still sometimes face the issue of ATM machines out of money, machines not working, server being down. So its best in the interest of the customers as well as the Bank to avoid such failures and improve the customer satisfaction.

LIMITATION48

Some of the limitation are mentioned as under: The research is carried on respondents as per the convenience thus the results may vary. Reluctance on the part of respondents to provide an accurate account of their personal details. Scope of the study being limited to Delhi, the finding of the study cannot be generalized for the universe on the whole. Most of the people are uneducated and does not aware about the product.

49

CONCLUSION Most of the people are aware of internet banking, either fully or partially. Advertisements play a major role in making people aware of internet banking. Most of people use online services so that they can view their balances

transfer funds between the accounts. Amongst the various factors influencing the usage all time availability is ranked as the major motivating factor, followed by direct access, ease of use as the least motivating factors. As regards the benefits accruing, time saving came out to be the major benefit followed by easy processing, inexpensive and easy fund transfer.

50

RECCOMENDATION The banks should come forward with more meaning full and awareness campaigns to create awareness among customers regarding internet banking services and to make internet banking popular among the entire age and income group. The bank should provide services such as account information and balances statement of account and customized information. Internet banking services should be user friendly. Bank should offer internet banking by the way of convenience and reach so that it should be popular among all the age groups. Systems should be simple to use, fast and user friendly. Service should be standardized that whatever the solution is used the customer is familiar with the procedure followed. For the low income customer there is still a bit of a pricing issue, especially when the withdrawals are very small . Customers on low income should find the transactions affordable.

51

References

1. Eglnd, . (1998). Banking and Finance on the Internet, John Wiley and

Sons. ISBN:0471292192 page 41 from "Banking and Finance on the Internet". Retrieved on 2008-07-10.. See also "The Home Banking Dilemma". Retrieved on 2008-07-10. and "Computer Giants Giving a Major Boost to Increased Use of Corporate Videotex". Retrieved on 2008-07-10. 2. HASAN (2002).The e-Commerce Solution Guide - Essay UK eCommerce on a Budget. Retrieved July 30,2006. 3. DeYoung(2001) Homelink is a Trade Mark of Nottingham Building Society' 4. Agarwal, N., Agarwal, R., Sharma, P. and Sherry, A. M. (2003), Ebanking for comprehensive EDemocracy: An Indian Discernment, Journal of Internet Banking and Commerce, Vol. 8, No. 1, June. 5. Awamleh R, Evans J and Mahate A. (2003), Internet Banking in Emergency Markets The Case of Jordon - A Note, Journal of Internet Banking and Commerce, Vol. 8, No. 1, June. 6. Booz-Allen & Hamilton, Inc. (1997)."Booz-Allen's Worldwide Survey Revealed A Huge Perception Gap Between Japanese And American/European Banks Regarding Internet Banking." 7. Corrocher, N. (2002), Does Internet banking substitute traditional banking? Empirical evidence from Italy, Working Paper, CESPRI, No. 134, November. 8. Dasgupta, P. (2002), Future of E banking in India, available at www.projectshub.com December, accessed as on August 16, 2003.

52

References to web page:1. 2. 3. 4. 5. http://www.banknetindia.com http://www.bankinservices.htm. http://www.advancebank.com/doc http://www.icici.com http://www.advancebank.de.com

QUESTIONNAIRE Part-A Q.1) Do you have an account with ICICI bank? a) Yes ( ) b) No ( ) Q.2) How long access ICICI bank? a) Less than 1 year ( ) b) 1-3 year ( ) c) 3-5 year ( ) d) More than 5 year ( ) Q.3) Are you aware about e-banking services provided by ICICI bank? a) Yes b) No ( ) ( )

Q.4) Are you often using the service of ICICI bank? a) Yes b) No ( ) ( )

53

Q.5) While opening up account were you aware of e-banking services provided by ICICI bank?

a) Fully aware b) Had an rough idea c) NoQ.6) If answer is (c), how did you get to know about internet banking services of your bank? a) Personal visit ( ) b) Executive from the bank ( ) c) Friends ( ) d) Advertisement ( )

Q.7) If answer to question no.4 is a or b, which of the following internet banking services you are using ? a) b) c) d) Transfer fund between accounts Create fixed deposits online View account balances ATM facility ( ( ) ( ) ( ) )

Q.8) Have you ever used online net banking facility provided by ICICI bank?a) Yes

( ) b) No ( ) If yes then jump to shift to q-8

54

Q.9) Are you satisfy with the e-banking services provided by the bank?a) Strongly agree b) Agree c) Neutral d) Disagree e) Strongly disagree

Q.10) Which of the following benefit you get while using e-banking services?a) Time saving b) Economical c) Easy processing d) Easy fund transfer

( ) ( ) ( ) ( )

Q.11) Do you feel secure using these services? a) Yes b) No Q.12) How many times have you experienced service failures? a) Frequently b) Never c) Occasionally

55

Q.13) What other services you would like to have through e-banking services? ..

PERSONNAL INFORMATION

1) NAME-: 2) What is your Gender? a) Male ( ) b) Female ( ) 3) What is your Age group (years)? a) 21-32 ( ) b) 33-50 ( ) c) 50 above ( )

56