A

Report of Viva

Titled

“Internet – Introduction, Need, Tools, Services and

Internet in India”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted To: - Submitted By:-

Miss Hem Ahuja Swati Panwar

Lecturer (MBA Deptt.) MBA II Sem

2008-2010

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 TABLE OF CONTENTS

S.No. Topic Page No.

1. Introduction 1
2. History of Internet 2
3. Need of Internet 3
4. Communicating via Internet 5
5. Tools of Internet 6
6. Services provided by Internet 7
7. Web Browser 8
8. World Wide Web (WWW) 10
9. Internet Security 12
10. Internet in India 13
11. Case Study 16

Engineering College Bikaner Society’s

College of Engineering & Technology
Karni Industrial Area, Pugal Road, Bikaner
Phone: +91-151-2253404, +91-151-3090326

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 CERTIFICATE

This is to certify that the Viva project entitled “Internet – Introduction,

Need, Tools, Services and Internet in India” has been carried out
by Swati Panwar under my guidance in partial fulfillment of the degree of
MASTER OF BUSINESS ADMINISTRATION of College of Engineering &
Technology, Bikaner during the academic year 2008-2010. To the best of my
knowledge and belief this work has not been submitted elsewhere for the award of
any other degree.

Viva Guide

Miss Hem Ahuja

Date:

Place: CET, Bikaner

ACKNOWLEDGEMENT

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 I feel immense pleasure in acknowledging those individuals and institutions that helped

me with their fruitful suggestions and encouragements for making it possible to accomplish the

work of the project in time.

I express my profound gratitude to my guide Miss Hem Ahuja (Faculty CET) for

providing sound moral support, valuable guidance and all possible help for undertaking seminar

project work.

I am grateful to Mr. S.K. VYAS, Head, Deptt. Of Management and Technology, Bikaner

for constant inspiration, guidance, moral support during the project work.

I would like to thank the members of panel Miss Sarita Choudhary (Faculty ECB) and

Mrs. Alka Swami (Faculty CET) for spending their valuable time, critical analysis and

comments on seminar presentation.

I acknowledge the significant role of my family members for providing a happy

environment and inspiration needed to undertake this work.

(SWATI PANWAR)

Introduction

By the turn of the century, information, including access to the Internet, will be the basis for
personal, economic, and political advancement. The popular name for the Internet is the

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information superhighway. Whether we want to find the latest financial news, browse through
library catalogs, exchange information with colleagues, or join in a lively political debate, the
Internet is the tool that will take us beyond telephones, faxes, and isolated computers to a
burgeoning networked information frontier. The Internet supplements the traditional tools we use
to gather information, Data Graphics, News and correspond with other people. Used skillfully,
the Internet shrinks the world and brings information, expertise, and knowledge on nearly every
subject imaginable straight to our computer.

What is the Internet?

The Internet links are computer networks all over the world so that users can share resources and
communicate with each other. Some computers have direct access to all the facilities on the
Internet such as the universities. And other computers, e.g. privately-owned ones, have indirect
links through a commercial service provider, who offers some or all of the Internet facilities. In
order to be connected to Internet, we must go through service suppliers. Many options are
offered with monthly rates. Depending on the option chosen, access time may vary.
The Internet is what we call a Meta network, that is, a network of networks that spans the globe.
It's impossible to give an exact count of the number of networks or users that comprise the
Internet, but it is easily in the thousands and millions respectively. The Internet employs a set of
standardized protocols which allow for the sharing of resources among different kinds of
computers that communicate with each other on the network. These standards, sometimes
referred to as the Internet Protocol Suite, are the rules that developers adhere to when creating
new functions for the Internet. The Internet is also what we call a distributed system; there is no
central archive. Technically, no one runs the Internet. Rather, the Internet is made up of
thousands of smaller networks. The Internet thrives and develops as its many users find new
ways to create, display and retrieve the information that constitutes the Internet.

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 History of the Internet

In the year 2009, we send e-mails, make calls on the internet discuss topic we taken in interested.
Even our banking is going virtual but what we taken for granted today was only a way a guide
day 50 years ago. In order to understand have we got the far lets go back to 1957 when
everything begin before 1957 computers only worked only one task at a time this is call batch
processing. Of course this was quite ineffective when computers getting bigger and bigger they
had to be stored in special cooled rooms. The bank development could not work specialist had to
be called in to connect them. Inter programming at that time lot of manual work and indirect
connection to the computers led to lots of bucks and wasting time and frame the develop
business.

The year 1957 marked a big change a remote connection had to be installed several a develop
work directly on the computer. At the same we have idea of time sharing. This is the first
concept in computer technology to share the processing power of one computer with multiple
users.

On October 4th 1957 during the first cold war the first unman satellite sputnik-1 was sent in the
orbit by the Soviet Union. In order to secure America’s leading technology the US found it the
DARPA in Feb. 1958 .at that time knowledge was only transferred by people. The DARPA
planed a large scale computer network in order to eccentric knowledge transfer and avoid the
doubling up of already existing research.

The network would become the ARPA Net furthermore 3 other concepts were to develop which
are fundamental for the history of the internet. The concept to the military network by the RANN
Corporation in America the commercial network of the national physical laboratory (NPL) in
England and the scientific network CYCLADES. The scientific, military and commercial
approaches of this concept are foundation for our modern internet.

Let’s begin with ARPA Net, the most familiar of these networks. Its development began in 1966.
Universities were generally quite conscious about sharing their computer. Therefore small
computers were put in the front of mainframe. The inter face message processor took over

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control of the network activities where the mainframe was only in charge of the initialization of
program. Since only the IMP were inter connected in the network this was also called IMP
subnet. For the first connection between the computer network control protocol later on the NCP
was replaced by the more efficient TCP. The specific feature of TCP is the verification of file
transfer.

Since the NPL network was designed on the commercial basis a lot of uses and file transfer were
expected. In order to avoid conjunction of lines send files divided into smaller packets which
were put together again at the receiver. Packet switching was born. 1962 the centralized
architecture becomes distributed network. Since CYCLADES had a fast more than ARPA Net.
The focus was led to communication with other networks. In this way the tern Internet is born.
Moreover the CYCLADES concept whams further ARPA and NPL. During communication
between sender and receiver the computer were not intervene anymore but simply serve as a
transfer node. CYCLADES protocols are making a physical layer there were use implemented
into hardware providing a direct connection with the receiver and structure. Inspire by the
CYCLADES network and their concept gained importance everywhere. The phone company
develops x.25 protocol which is able to communicate through their service in exchange in
monthly basic charges. The ARPA’s TCP was to connect the computer through gateways and the
international organizations for standardization design the OSI reference model. Finally the TCP
is assimilated the preference of the OSI layer model and gave way to TCP/IP protocol. A
standard which guaranty compatibility between network and finally merge them was creating the
Internet. By Feb. 28 1990 the ARPA Net hardware was removed but the internet was often
remains.

Need of Internet

 Communication: The foremost target of internet has always been the communication.
And internet has excelled beyond the expectations .Still; innovations are going on to make it
faster, more reliable. By the advent of computer’s Internet, our earth has reduced and has
attained the form of a global village. Now we can communicate in a fraction of second with
a person who is sitting in the other part of the world. Today for better communication, we
can avail the facilities of e-mail; we can chat for hours with our loved ones. There are plenty

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 messenger services in offering. With help of such services, it has become very easy to
establish a kind of global friendship where we can share our thoughts, can explore other
cultures of different ethnicity.

 Resource sharing: Share data, programs, and equipment across geographic boundaries.
A file can be put on a “Shared Location” or onto a File Server for instant use by colleagues.
Mirror servers and peer-to-peer networks can be used to ease the load of data transfer.

 Reliability: Replication of files and resources allowing operation to continue despite

hardware failures.

 Cost efficiency: It is relatively inexpensive to publish information on the Internet. At a

fraction of the cost to publish information by traditional methods, various organizations and
individuals can now distribute information to millions of users. It costs only a few thousand
dollars to establish an Internet presence and publish content on the Internet.

 Speedy Access to Information: The Internet allows computer users to connect to

other computers and information stores easily, wherever they may be across the world. They
may do this with or without the use of security, authentication and encryption technologies,
depending on the requirements. This is encouraging new ways of working from home,
collaboration and information sharing in many industries. An accountant sitting at home can
audit the books of a company based in another country, on a server situated in a third country
that is remotely maintained by IT specialists in a fourth. These accounts could have been
created by home-working bookkeepers, in other remote locations, based on information e-
mailed to them from offices all over the world. Some of these things were possible before the
widespread use of the Internet, but the cost of private leased lines would have made many of
them infeasible in practice.

 Business from home: Many services are now provided on the internet such as online
banking, job seeking, purchasing tickets for our favorite movies, guidance services on array
of topics engulfing the every aspect of life, and hotel reservations. Often these services are
not available off-line and can cost us more.

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 Communicating Via Internet

The Web is known as a client-server system. Our computer is the client; the remote computers
that store electronic files are the servers. To visit the website, enter the address or URL of the
website in our web browser. Browser requests the web page from the web server that hosts the
requested site. The server sends the data over the Internet to our computer. Our web browser
interprets the data, displaying it on our computer screen.
"Glue" that holds the Web together is called hypertext and hyperlinks. This feature allows
electronic files on the Web to be linked so we can jump easily between them. On the Web, we
navigate through pages of information--commonly known as browsing or surfing--based on what
interests us at that particular moment. Web pages are written in a computer language called
Hypertext Markup Language or HTML

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 Tools of Internet

Software: Enables communication and exchange of information, by following a set of rules,

called protocols.
Web browser: A web browser is a software application that enables a user to display and
interact with text, images, videos, music and other information typically located on a Web page
at a website on the World Wide Web or local area network.
Hardware: Physically connects the computers together- telephone lines, fiber-optic cables,
routers and gateways, and the computers themselves.
Modem: Modulator- demodulator is devices which converts digital signal into analog for
transmission on over analog transmission facilities as telephone lines. At receiving end modem
perform the reverse function & converts analog signal into digital form.
Protocols: Protocol is a set of predefined rules & regulations for communication among
computers. When two persons talk to each other, they can understand their talk only when they
use same language. Just like that the communication between two computers is possible only
when there is same protocol. Protocol is used for communication in different systems like: -
computers, terminals, remote sensor entities as – user application program, file transfer packages,
database management system, E-mail facilities etc. Thus, protocol is a set of rules that transmits
the data. Some famous protocols are:-

1. TCP (Transmission control protocol): This protocol is used for exchange of

information in information packets level on internet points.

2. IP (Internet protocol): In this, set of rules are used to send or receive the information on
Internet Address Level.

3. HTTP (Hyper Text Transfer Protocol): In this, set of rules are used with corresponding
programs on Internet.

4. FTP (File Transfer Protocol): These are also used for transferring files on the Internet.

Communication Channel: Channels also called communication lines or links are the
means by which data is transmitted between the sending and receiving devices in a network. A

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channel makes use of a variety of media. These include twisted-pair coaxial cables and fiber
optic cables, all of which physically link the devices in a network. Also in included are
microwave system, communication satellite system and cellular radio, all of which use
microwave and other radio waves to transmit and receive data.

WWW: World Wide Web is a large scale, online storage of information that users can search
using an interactive application program called browser. WWW is an internet- based
network of web servers. A web server is a host computer that provides the information to
users.

Services provided by Internet

E-mail: Electronic mail or E-mail, as popularly known, is a method of sending and receiving
messages (mail) electronically over a computer network.

Chatting and Instant Messaging: Chat programs allow users on the Internet to
communicate with each other by typing in real time

Video- conferencing: Video conferencing uses the same technology as IRC, but also
provides sound and video pictures. It enables direct face-to-face communication across network

Net Banking: Electronic banking (or net banking) refers to an application of the Internet that
allows customers to can dial into bank networks or their websites, using their own telephones
and computers, and to get a host of banking services directly on their home or office PCs.

Online Education: The internet has greatly revolutionized the way we learn. Distance
education is a concept that has been around for a long time. A large number of formats such as
videotapes, audiotapes, and television have been used for distance education. However, the
internet has made this form of education more popular than ever. Statistics show that well over 2
million people are attending online college

Accessing Information: Information is probably the biggest advantage internet is offering.

The Internet is a virtual treasure trove of information. Any kind of information on any topic

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under the sun is available on the Internet. The search engines like Google, yahoo is at our service
on the Internet.

Downloading Software and various files: This is one of the most happening and fun
things to do via the Internet. We can download innumerable, games, music, videos, movies, and
a host of other entertainment software from the Internet, most of which are free.

Getting Latest Market Information: We can get markets latest information by internet

Online Gaming: Play games on internet

E – Commerce: Ecommerce is the concept used for any type of commercial maneuvering, or
business deals that involves the transfer of information across the globe via Internet. It has
become a phenomenon associated with any kind of shopping, almost anything. We name it and
E-commerce with its giant tentacles engulfing every single product and service will make us
available at our door steps. It has got a real amazing and wide range of products from household
needs, technology to entertainment.

Web Browser

Web browser is a software application for retrieving, presenting, and traversing information
resources on the World Wide Web. An information resource is identified by a Uniform Resource
Identifier (URI) and may be a web page, image, video, or other piece of content. Hyperlinks
present in resources enable users to easily navigate their browsers to related resources.

Although browsers primarily intended to access the World Wide Web, they can also be used to
access information provided by web servers in private networks or content in file systems. The
major web browsers in order of usage according to Net Applications are Windows Internet
Explorer, Mozilla Firefox, Apple Safari, Google Chrome, and Opera.

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Function: The purpose of a web browser is to display resources to the user. This process
begins when the user inputs a Uniform Resource Identifier (URI), for example
http://en.wikipedia.org/, into the browser. The prefix of the URI determines how the URI
will be interpreted. The most commonly used kind of URI starts with http: and identifies
content to be retrieved over Hypertext Transfer Protocol (HTTP). Many browsers also
support a variety of other prefixes, such as https: for HTTPS, ftp: for the File Transfer
Protocol, and file: for local files. Prefixes that the web browser cannot directly handle are
often handed off to another application entirely. For example, mailto: URIs is usually
passed into the user's default e-mail application, and news: URIs are passed to the user's
default newsgroup reader.

Features: Available web browsers range in features from minimal, text-based user interfaces
with bare-bones support for HTML to rich user interfaces supporting a wide variety of file
formats and protocols. Browsers which include additional components to support Usenet
news, Internet Relay Chat (IRC), and e-mail are often referred to as "Internet suites"
rather than merely "web browsers". Most major web browsers allow the user to open
multiple information resources at the same time, either in different browser windows or in
different tabs of the same window. Major browsers also include pop-up blockers to prevent
unwanted windows from "popping up" without the user's consent.

Most web browsers can display a list of web pages that the user has bookmarked so that the user
can quickly return to them. Bookmarks are also called "Favorites" in Internet Explorer.
In addition, all major web browsers have some form of built-in web feed aggregator. In
Mozilla Firefox, web feeds are formatted as "Live bookmarks" and behave like a folder of
bookmarks corresponding to recent entries in the feed. In Opera, a more traditional feed
reader is available which stores and displays the contents of the feed.

User interface

Most major web browsers have these user interface elements in common:

• Back and forward buttons to go back to the previous resource and forward again.
• A refresh or reload button to reload the current resource.

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 • A stop button to cancel loading the resource. In some browsers, the stop button is often
merged with the reload button.
• A home button to return to the user's home page
• An address bar to input the Uniform Resource Identifier (URI) of the desired resource
and display it.
• A search bar to input terms into a search engine
• A status bar to display progress in loading the resource and also the URI of links when
the cursor hovers over them, and page zooming capability.

Major browsers also possess incremental find features to search within a web page.

Privacy and security

Most browsers support HTTP Secure and offer quick and easy ways to delete the web cache,
cookies, and browsing history.

World Wide Web (WWW)

The World Wide Web (commonly abbreviated as "the Web") is a system of interlinked
hypertext documents accessed via the Internet. With a Web browser, one can view Web pages
that may contain text, images, videos, and other multimedia and navigate between them using
hyperlinks. Using concepts from earlier hypertext systems, the World Wide Web was started in
1989 by the English physicist Sir Tim Berners-Lee, now the Director of the World Wide Web
Consortium, and later by Robert Cailliau, a Belgian computer scientist, while both were working
at CERN in Geneva, Switzerland. In 1990, they proposed building a "web of nodes" storing
"hypertext pages" viewed by "browsers" on a network, and released that web in December.
Connected by the existing Internet, other websites were created, around the world, adding
international standards for domain names & the HTML language. Since then, Berners-Lee has
played an active role in guiding the development of Web standards (such as the markup
languages in which Web pages are composed), and in recent years has advocated his vision of a
Semantic Web.

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The World Wide Web enabled the spread of information over the Internet through an easy-to-use
and flexible format. It thus played an important role in popularizing use of the Internet. Although
the two terms are sometimes conflated in popular use, World Wide Web is not synonymous with
Internet. The Web is an application built on top of the Internet.

How it works

The terms Internet and World Wide Web are often used in every-day speech without much
distinction. However, the Internet and the World Wide Web are not one and the same. The
Internet is a global data communications system. It is a hardware and software infrastructure that
provides connectivity between computers. In contrast, the Web is one of the services
communicated via the Internet. It is a collection of interconnected documents and other
resources, linked by hyperlinks and URLs. In short, the Web is an application running on the
Internet. Viewing a Web page on the World Wide Web normally begins either by typing the
URL of the page into a Web browser, or by following a hyperlink to that page or resource. The
Web browser then initiates a series of communication messages, behind the scenes, in order to
fetch and display it.

First, the server-name portion of the URL is resolved into an IP address using the global,
distributed Internet database known as the domain name system, or DNS. This IP address is
necessary to contact the Web server. The browser then requests the resource by sending an
HTTP request to the Web server at that particular address. In the case of a typical Web page, the
HTML text of the page is requested first and parsed immediately by the Web browser, which
then makes additional requests for images and any other files that form parts of the page.
Statistics measuring a website's popularity is usually based either on the number of 'page views'
or associated server 'hits' (file requests) that take place. Having received the required files from
the Web server, the browser then renders the page onto the screen as specified by its HTML,
CSS, and other Web languages. Any images and other resources are incorporated to produce the
on-screen Web page that the user sees.

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 Internet Security

When a computer connects to a network and begins communicating with others, it is taking a
risk. Internet security involves the protection of a computer's internet account and files from
intrusion of an unknown user. Basic security measures involve protection by well selected
passwords, change of file permissions and back up of computer's data.

Security concerns are in some ways peripheral to normal business working, but serve to highlight
just how important it is that business users feel confident when using IT systems. Security will
probably always be high on the IT agenda simply because cyber criminals know that a successful
attack is very profitable. This means they will always strive to find new ways to circumvent IT
security, and users will consequently need to be continually vigilant. Whenever decisions need to
be made about how to enhance a system, security will need to be held uppermost among its
requirements.

Internet Security Tools:

Firewalls: A system designed to prevent unauthorized access to or from a private network.

Firewalls can be implemented in both hardware and software, or a combination of both.
Firewalls are frequently used to prevent unauthorized Internet users from accessing private
networks connected to the Internet, especially intranets. All messages entering or leaving the
intranet pass through the firewall, which examines each message and blocks those that do not
meet the specified security criteria.

Encryption: Encryption is the process of transforming information (referred to as plaintext)

using an algorithm (called cipher) to make it unreadable to anyone except those possessing
special knowledge, usually referred to as a key. The result of the process is encrypted
information (in cryptography, referred to as cipher text). In many contexts, the word encryption
also implicitly refers to the reverse process, decryption (e.g. “software for encryption” can
typically also perform decryption), to make the encrypted information readable again (i.e. to
make it unencrypted).

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Anti Virus: Antivirus software (alternate spelling anti-virus) mainly prevents and removes
computer viruses, including worms and Trojan horses. Such programs may also detect and
remove adware, spyware, and other forms of malware.

Password Security: A password policy is a set of rules designed to enhance computer

security by encouraging users to employ strong passwords and use them properly. A password
policy is often part of an organization's official regulations and may be taught as part of security
awareness training. The password policy may either be advisory or mandated by technical
means.

Biometric Security: Biometrics refers to methods for uniquely recognizing humans based
upon one or more intrinsic physical or behavioral traits. In information technology, in particular,
biometrics is used as a form of identity access management and access control. It is also used to
identify individuals in groups that are under surveillance.

Internet in India

1995
- VSNL introduces internet in India via dialup in 6 cities on Aug 14,1995.

1996
-Rediff.com launched by Ajit Balakrishnan
-India’s first cyber café called “Cybercafe” launched in a Mumbai hotel.

1997
-First online banking site launched by ICICI Bank
-Naukri.com launched; this becomes India’s first profitable dotcom
- Sabeer Bhatia’s Hotmail sold to Microsoft for $400 million in USA ; he becomes the poster
boy of the Internet age to Indians

1998
-India introduces new ISP policy which ends VSNL’s monopoly on internet
-Sify becomes India’s first ISP

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-First major hacking case-teenagers hack data on BARC’s servers
-Launch of Nasscom by Dewang Mehta, a chartered accountant by profession to promote IT
industry
- Cybercafés start mushrooming across Indian cities

1999
-India world sold to SIFY for $115 million; this triggers off the dotcom boom
- Large number of dotcoms appear, mostly modeled as e-marketplaces but have untested revenue
models
- Webdunia, India’s first and most successful Hindi portal launched

2000
-IT ACT 2000 passed by the Indian Parliament
-Bazzee.com launched based on the EBay model
-Indya.com launched with Rs 4.5 crore campaign blitz
-Foreign portals set up shop in India; Yahoo & MSN launch Indian sites -yahoo.co.in &
msn.co.in respectively
-Birth of online journalism-Tehelka.com exposes cricket betting scandal
- ITC launches E-Choupal initiative to take the internet to the villages

2001
-First cyber crime related arrest-2 arrested for hacking go2nextjob.com
-Indian Railways launches online ticketing site, irctc.com
-India’s first cyber crime police station opens in Bangalore
- Dotcom bubble bursts – some sites close, some go into hibernation

2002
-Home Trade fiasco– brokerage site launched with Rs 65 crore blitz goes bust
- New dotcoms start emerging with more refined revenue models

2003
-Air Deccan becomes first airlines to offer online ticketing in India
- Phase of consolidation and stocktaking for Indian dotcoms

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2004
-Dotcoms start exercising exit options
-EBay buys out Bazee.com & Monster.com buys Jobsahead.com

-First Indian Dotcoms IPOs are successful– indiabulls.com & indiainfoline.com

- A high profile cyber crime exposes sheer inadequacy of India’s IT laws - Baazee CEO jailed
for MMS scandal

2005 (circa)
-40 million net users (4% of total estimated net users in the world)
-200,000 cyber cafes in country (accounting for 60% of net users)
-more than 1000,000 users do online share trading
-half a million broadband connections
-Rs 570 crore total e-commerce transactions in India
-Average no of transactions per month – 440000
-Average value per transaction – Rs 1080
-Indian Railway online ticketing accounts for 63% of e-commerce (Rs 370 cr.)
-ITC E-Choupal demonstrates rural internet adoption - expands to 5300 kiosks serving 3.2
million farmers

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 Case Study

Abstract:

The case, 'The Indian Internet Banking Journey' examines the concept of Internet banking, its
benefits and problems. It also discusses the initiatives taken by ICICI bank, the pioneer and
leading provider of Internet banking services in India. The case explores the reasons for the
limited growth of Internet banking in India and discusses its future as well.

Issue

» Understand the basic concepts of Internet banking, its working mechanism and benefits.

The Internet Banking Boom

In 2001, a Reserve Bank of India survey revealed that of 46 major banks operating in India,
around 50% were either offering Internet banking services at various levels or planned to in the
near future. According to a research report, while in 2001, India's Internet user base was an
estimated 9 lac; it was expected to reach 90 lakh by 2003. Also, while only 1% of these Internet
users utilized the Internet banking services in 1998, the Internet banking user base increased to
16.7% by mid- 2000. Many of the major banks like ICICI, HDFC, IndusInd, IDBI, Citibank,
Global Trust Bank (GTB), Bank of Punjab and UTI were offering Internet banking services.

Based on the above statistics and the analysts' comments that India had a high growth potential
for Internet banking, the players focused on increasing and improving their Internet banking
services. As a part of this, the banks began to collaborate with various utility companies to
enable the customers to perform various functions online.

ICICI's 'Infinity,' which was already a leader in the Indian Internet banking arena, began to allow
its customers to pay their online real time shopping bills. HDFC, through its 'payment gateway'
feature, allowed its Internet banking customers to make online and real time payments for their
purchases. HDFC also entered into tie-ups with various portals to provide these business-to-
customer (B2C) e-commerce transactions.

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As more banks entered Internet banking arena, the competition between the banks also increased.

This compelled the banks to focus on capturing new markets and customers and adopting
advanced technology on the Internet. In the light of these developments, industry watchers
remarked that Internet banking had arrived in a big way. Though it had a long way to go
compared to the global standards, it was beginning to be seen as a replacement for the traditional
banking set up in the future."

About Internet Banking

Globally, the banking business has always been in the forefront of harnessing technology to
improve its services and efficiency.

Banks have been quick to adopt rapidly evolving electronic and telecommunication technologies
to deliver an extensive line of value added products and services to their customers.
By the early 1990s, direct dial-up connections, personal computers, tele-banking and automated
teller machines (ATMs) became common in most developed nations. Internet banking evolved in
the mid-1990s when Internet and the World Wide Web began to catch on. Soon, many major
banks in the US and Europe began to use the Internet to provide banking services. Internet
banking is a web-based service that enables the bank's authorized customers to access their
account information. It allows the customers to log on to the bank's website with the help of a
bank-issued identification and a personal identification number (PIN).

ICICI - Internet Banking Initiatives

ICICI bank was incorporated as a commercial banking company, by the Industrial Credit and
Investment Corporation of India (ICICI), in May 1994. The first ICICI branch was started in
June 1994 at Chennai. The bank provides an array of domestic and international banking services
to enable national and international trade and business, investment and foreign exchange and
treasury services. Right from its inception the bank focused more on incorporating advanced
technology. The bank operated the largest chain of ATMs in the country, which amounted to
more than 450 in 2000. All the bank's branches were fully computerized and networked through
V-SAT technology.

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The Future

Despite the rosy predictions and increased corporate activity, the Indian Internet banking system
is facing many hurdles. The problems include operational risks, security risks, system
architecture risks, reputational risks and legal risks (See Exhibit I for Problems in Internet
Banking)...

• Apart from the security issues, there are a host of other problems like:
• PC user base in India is extremely low compared to global standards.
• The Internet user base is limited.
• Lack of infrastructure to advanced technology based banking services.
• The absence of a regulatory framework for Internet banking transactions in India.
• The mindset of the Indian consumer, who prefers personal interactions and is not very
comfortable, doing transactions through the Internet.
• Limited awareness about the potential of Internet banking on the part of bank.

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