FULL AND FINAL ONLINE BANKING Last PDF

A STUDY ON NEFT AND RTGS
1st page (Main Page)
A STUDY ON NEFT AND RTGS IN PRIVATE
SECTOR BANKS
A Project Submitted to
University of Mumbai for partial completion

of the degree of Bachelor in Commerce
(Banking and Insurance)
Under the Faculty of Commerce
By
SAMIR CHANDRAKANT DEVLIKAR
Under the Guidance of
MONALISA CARVALHO
DR. BABASAHEB AMBEDKAR COLLEGE
MARCH 18-19
1
A STUDY ON NEFT AND RTGS IN PRIVATE
SECTOR BANKS
A Project Submitted to
University of Mumbai for partial completion

of the degree of Bachelor in Commerce
(Banking and Insurance)
Under the Faculty of Commerce
By
SAMIR CHANDRAKANT DEVLIKAR
Under the Guidance of
MONALISA CARVALHO
DR. BABASAHEB AMBEDKAR COLLEGE
MARCH 18-19
2
Index
CHAPTER NUMBER PARTICULARS PAGE NUMBER
01 INTRODUCTION 8-12
02 REVIEW LITERATURE 13-31
03 RESEARCH METHODOLOGY 32-43
04 DATA ANALYSIS 44-72
05 CONCLUSION
73-77
06 BIBLIOGRAPHY 78-79
3
DR. BABASAHEB AMBEDKAR & ADV.GURUNATH

KULKARNI COLLEGE OF SCIENCE AND COMMERCE
NR.DIWANMAN TALAV, VASAI WEST
Certificate
This is to certifythatMs/Mr SAMIR CHANDRAKANT DEVLIKAR has worked
and duly completed her/his Project Work for the degree of Bachelor in Commerce
(Banking and Insurance) under the Faculty of Commerce in the subject of
BANKING and her/his project is entitled, A Study on NEFT and RTGS on Private
Sector Banks ” under my supervision.
I further certify that the entire work has been done by the learner under my guidance
and that no part of it has been submitted previously for any Degree or Diploma of any
University.
It is her/ his own work and facts reported by her/his personal findings and
investigations.
Name and Signature of

Date of submission: Seal of the
College
Guiding Teacher
4
Declaration by learner
I the undersigned Miss / Mr. SAMIR CHANDRAKANT DEVLIKAR hereby,
declare that the work embodied in this project work titled “A Study on
NEFT and RTGS on Private Sector Banks”,carried out under the guidance of
MONALISA CARVALHO is a result of my own research work and has not been
previously submitted to any other University for any other Degree/ Diploma to this or
any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.
Name and Signature of the learner
Certified by
Name and signature of the Guiding Teacher
5
Acknowledgment
To list who all have helped me is difficult because they are so numerous and
the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and

fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.
I would like to thank my Principal,Y. K. THOMBARE for providing the

necessary facilities required for completion of thisproject.
I take this opportunity to thank our Coordinator MONALISA CARVALHO

for her moral support and guidance.
I would also like to express my sincere gratitude towards my project guide
MONALISA CARVALHO whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various

reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.
6
INTRODUCTTION
7
INTRODUCTION ON ONLINE BANKING
Online banking, also known as internet banking, is an electronic payment system that
enables customers of a bank or other financial institution to conduct a range of financial
transactions through the financial institution's website. The online banking system will
typically connect to or be part of the core banking system operated by a bank and is in
contrast to branch banking which was the traditional way customers accessed banking
services.
Some banks operate as a "direct bank" (or “virtual bank”), where they rely completely on
internet banking.
Internet banking software provides personal and corporate banking services offering features
such as viewing account balances, obtaining statements, checking recent transaction and
making payments. Access is usually through a secure web site using a username and
password, but security is a key consideration in internet banking and many banks also
offer two factor authentication using a (security token).
What is Online Banking?

Online banking allows a user to execute financial transactions via the internet. Online banking
is also known as "internet banking" or "web banking." An online bank offers customers just
about every service traditionally available through a local branch, including deposits—these
are done online, using ATMs or through the mail—and online bill payment.
How Online Banking Works

Online banks do not provide direct ATM access, but they make provisions for consumers to
use ATMs at other banks and retail stores, and they may reimburse consumers for some of the
ATM fees charged by other financial institutions. The reduced overhead costs associated with
not having physical branches typically allow online banks to offer consumers significant
savings on banking fees; they also offer higher interest rates on accounts.
8
Online banks handle customer service by phone, email, or online chat. Online banking is
frequently performed on mobile devices now that Wi-Fi and 4G networks have become
widely available. In the United States, prominent online banks include Ally Bank, Bank5
Connect, Discover Bank, GE Capital Bank, and Synchrony Bank.
Advantages of Online Banking

Convenience is a major advantage of online banking. Basic banking transactions, such as
paying bills and transferring funds between accounts, can easily be performed at times
convenient to consumers. In effect, consumers can perform banking transactions 24 hours a
day, seven days a week.
Online banking is fast and efficient. Funds can be transferred between accounts almost
instantly, especially if the two accounts are held at the same banking institution. Banking
accounts can be monitored more closely, thanks to online banking. This allows consumers to
keep their accounts safe.
Around-the-clock access to banking information provides early detection of fraudulent

activity, thereby acting as a guardrail against financial damage or loss. Online banking allows
for the opening and closing of fixed deposit and recurring deposit accounts that typically offer
higher rates of interest.
Disadvantages of Online Banking

For a novice online banking customer, using systems for the first time may present challenges
that prevent transactions from being processed.
Although online banking security is continually improving, such accounts are still vulnerable
when it comes to hacking. Consumers are advised to use their own data plans, rather than
public Wi-Fi networks when using online banking, to prevent unauthorized access.
Additionally, online banking is dependent on a reliable internet connection. Connectivity
issues from time to time may make it difficult to determine if banking transactions have been
successfully processed. On occasion, consumers may prefer face-to-face interactions for more
complex banking issues.
9
Internet banking, also known as online banking, e-banking or virtual banking, is an electronic
payment system that enables customers of a bank or other financial institution to conduct a
range of financial transactions through the financial institution's website.
Different types of online financial transactions are:
National Electronic Fund Transfer (NEFT)

National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-
to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically
transfer funds from any bank branch to any individual, firm or corporate having an account
with any other bank branch in the country participating in the Scheme. Individuals, firms or
corporates maintaining accounts with a bank branch can transfer funds using NEFT. Even
such individuals who do not have a bank account (walk-in customers) can also deposit cash at
the NEFT-enabled branches with instructions to transfer funds using NEFT. However, such
cash remittances will be restricted to a maximum of Rs.50,000/- per transaction. NEFT, thus,
facilitates originators or remitters to initiate funds transfer transactions even without having a
bank account. Presently, NEFT operates in hourly batches - there are twelve settlements from
8 am to 7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm
on Saturdays.
Real Time Gross Settlement (RTGS)

RTGS is defined as the continuous (real-time) settlement of funds transfers individually on an
order by order basis (without netting). 'Real Time' means the processing of instructions at the
10
time they are received rather than at some later time; 'Gross Settlement' means the settlement
of funds transfer instructions occurs individually (on an instruction by instruction basis).
Considering that the funds settlement takes place in the books of the Reserve Bank of India,
the payments are final and irrevocable. The RTGS system is primarily meant for large value
transactions. The minimum amount to be remitted through RTGS is 2 lakh. There is no upper
ceiling for RTGS transactions. The RTGS service for customer's transactions is available to
banks from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 14:00 hours on
Saturdays for settlement at the RBI end. However, the timings that the banks follow may vary
depending on the customer timings of the bank branches.
Electronic Clearing System (ECS)

ECS is an alternative method for effecting payment transactions in respect of the utility-bill-
payments such as telephone bills, electricity bills, insurance premia, card payments and loan
repayments, etc., which would obviate the need for issuing and handling paper instruments
and thereby facilitate improved customer service by banks / companies / corporations /
government departments, etc., collecting / receiving the payments.
Immediate Payment Service (IMPS)

IMPS offers an instant, 24X7, interbank electronic fund transfer service through mobile
phones. IMPS is an emphatic tool to transfer money instantly within banks across India
through mobile, internet and ATM which is not only safe but also economical both in
financial and non-financial perspectives.
Objectives of IMPS:
• To enable bank customers to use mobile instruments as a channel for accessing their
banks accounts and remit funds
• Making payment simpler just with the mobile number of the beneficiary
• To sub-serve the goal of Reserve Bank of India (RBI) in electronification of retail

payments
• To facilitate mobile payment systems already introduced in India with the Reserve Bank
of India Mobile Payment Guidelines 2008 to be inter-operable across banks and mobile
operators in a safe and secured manner
11
• To build the foundation for a full range of mobile based Banking services.
REVIEW OF
LITERATURE
12
Meaning of LiteratureReview
• Provides an overview and a critical evaluation of a body of literature relating to a
research topic or a researchproblem.
• Analyzes a body of literature in order to classify it by themes or categories, rather
than simply discussing individual works one afteranother.
• Presents the research and ideas of the field rather than each individual work or
author byitself.
A literature review often forms part of a larger research project, such as within a
thesis (or major research paper), or it may be an independent written work, such as a
synthesis paper.
Purpose of a literaturereview
A literature review situates your topic in relation to previous research and
illuminates a spot for your research. It accomplishes several goals:
• provides background for your topic using previous research.
• shows you are familiar with previous, relevant research.
• evaluates the depth and breadth of the research in regards to your topic.
• determines remaining questions or aspects of your topic in need of research
Relationship between a literature review and a research

project
Academic research at the graduate level is always part of a dialogue among
researchers. As a graduate student, you must therefore indicate that you know where
your topic is positioned within your field of study.
Therefore, a literature review is a key part of most research projects at the graduate
level. There is often a reciprocal relationship between a literature review and the
research project for which it is written:
• A research project is often undertaken in response to a literature review. Doing the
literature review for a topic often reveals areas requiring further research. In this
way, writing the literature review helps to formulate the research question.
13
• A literature review helps to establish the validity of a research project by revealing

gaps in the existing literature on a topic that offer opportunities for newresearch.
National Literature Review
Rakesh H M & Ramya T J (2014)

In their research paper titled “A Study on Factors Influencing Consumer Adoption of
Internet Banking in India” tried to examine the factors that influence internet banking
adoption. Using PLS, a model is successfully proved and it is found that internet banking is
influenced by its perceived reliability, Perceived ease of use and Perceived usefulness. In the
marketing process of internet banking services marketing expert should emphasize these
benefits its adoption provides and awareness can also be improved to attract consumers’
attention to internet banking services.
Amruth Raj Nippatlapalli (2013)

In his research paper “A Study on Customer Satisfaction of Commercial Banks: Case Study
on State Bank of India”. This paper present Customer satisfaction, a term frequently used in
marketing, is a measure of how products and services supplied by a company meet or
surpass customer expectation. Customer satisfaction is defined as "the number of customers,
or percentage of total customers, whose reported experience with a firm, its products, or its
services (ratings) exceeds specified satisfaction goals. "Banking in India originated in the
last decades of the 18th century. The first banks were The General Bank of India, NOW
which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct.
The oldest bank in existence in India is the State Bank of India, which originated in the Bank
of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was
one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India
Company. For many years the Presidency banks acted as quasi-central banks, as did their
successors. The three banks merged in 1921 to form the Imperial Bank of India.
14
Mr. Vijay Prakash Gupta & Dr. P. K. Agarwal (2013)

In their research paper “Comparative Study of Customer Satisfaction in Public Sector and
Private Sector Banks in India”. This paper gives with the introduction of liberalization policy
and RBI's easy norms several private and foreign banks have entered in Indian banking sector
which has given birth to cut throat competition amongst banks for acquiring large customer
base and market share. Banks have to deal with many customers and render various types of
services to its customers and if the customers are not satisfied with the services provided by
the banks then they will defect which will impact economy as a whole since banking system
plays an important role in the economy of a country, also it is very costly and difficult to
recover a dissatisfied customer. Since the competition has grown manifold in the recent times
it has become a herculean task for organizations to build loyalty, the reason being that the
customer of today is spoilt for choice. It has become imperative for both public and private
sector banks to perform to the best of their abilities to retain their customers by catering to
their explicit as well as implicit needs. Many a times it happens that the banks fail to satisfy
their customer which can cause huge losses for banks and there the need of this study arises.
The purpose of this research article is to examine the customer satisfaction among group of
customer towards the public sector& private sector banking industries in India. Study is cross-
sectional and descriptive in nature. The researcher tries to makes an effort to clarify the
Customer Service satisfaction in Indian banking Sector. Descriptive research design is used for
this study, where the data is collected through the questionnaire. The information is gathered
from the different customers of the two banks, viz., PNB and HDFC Bank located in the
Meerut Region, Uttar Pradesh. Hundred bank respondents from each bank were contacted
personally in order to seek fair and frank responses on quality of service in banks. The service
quality model developed by Zeithamal, Parsuraman and Berry (1988) has been used in the
present study. The analysis clearly shows that there exists wide perceptual difference among
Indian (public sector) banks regarding overall service quality with their respective customers,
when compared to Private sector banks. Whereas the said perceptual difference in private
banks isnarrow.
15
Ms. Nisha Malik & Mr. Chand Prakash Saini (Jul 2013)
In their research titled on “Private Sector Banks Service Quality and Customer Satisfaction” A
Empirical Study two Private Sector Banks”. This research paper is an effort to examine the
relationship between service quality and customer satisfaction of two private sectors bank of
India. Service quality has been described as a form of attitude that results from the comparison
of prospect with recital (Cronin and Taylor, 1992, Parasuraman et al, 1985). Gronroos 1982)
argued that customers, while evaluating the quality of service, compare the service they expect
with perceptions of the services they actually receive. Since financial products offered by
various banks are similar by nature then why any particular bank of product of any bank is
preferred than others a matter of interest for academician as well as banking industry. They
may be difference between customers of public and private sector banks, but why are two
banks of one sector being preferred differently by customers. This research study is an effort to
find out the answer of these questions.
Vijay M. Kumbhar (2011)

In his research paper “Factors Affecting the Customer satisfaction In E-Banking: Some
evidences Form Indian Banks”. This study evaluates major factors (i.e. service quality, brand
perception and perceived value) affecting on customers’ satisfaction in e-banking service
settings. This study also evaluates influence of service quality on brand perception, perceived
value and satisfaction in e-banking. Required data was collected through customers’ survey.
For conducting customers’ survey liker scale based questionnaire was developed after review
of literature and discussions with bank managers as well as experts in customer service and
marketing. Collected data was analyzed using principle component (PCA) using SPSS 19.0. A
result indicates that, Perceived Value, Brand Perception, Cost Effectiveness ,Easy to Use,
Convenience, Problem Handling, Security/Assurance and Responsiveness are important
factors in customers satisfaction in e-banking it explains 48.30 per cent of variance. Contact
Facilities, System Availability, Fulfillment, Efficiency and Compensation are comparatively
less important because these dimensions explain Responsiveness, Easy to Use, Cost
Effectiveness and Compensation are predictors of brand perception in e-banking and
Fulfillment, Efficiency, Security/Assurance, Responsiveness, Convenience, Cost
Effectiveness, Problem Handling and Compensation are predictors of perceived value in e-
banking.
16
Pooja Malhotra & Balwinder SINGH (2009)

In their research paper “The Impact of Internet Banking on Bank Performance and Risk: The
Indian Experience”. The paper describes the current state of Internet banking in India and
discusses its implications for the Indian banking industry. Particularly, it seeks to examine the
impact of Internet banking on banks’ performance and risk. Using information drawn from the
survey of 85scheduled banking services. The univariate analysis indicates that Internet banks
are larger banks and have efficiency ratios and profitability as compared to non-Internet banks.
Internet banks rely more heavily on core deposits for funding than non-Internet banks do.
However, the multiple regression results reveal that the profitability and offering of Internet
banking does not have any significant association, on the other hand, Internet banking has a
significant and negative association with risk profile of the banks.
International Literature Review
Shaza W. Ezzi (April 2014)

In their research paper titled “A Theoretical Model for Internet Banking: Beyond Perceived
Usefulness and Ease of Use” tried to inquired different types of electronic banking like ATM’s,
telephone banking, and electronic funds transfer, Internet banking like has evolved from
consumers’ needs to have superior access to banking services clear of most banks teller-staffed,
normal operating hours. Additionally, Internet banking has grown swiftly from the recent and the
span increases in e- commerce. Internet banking (IB) continues to govern the landscape of
electronic banking as consumers continue to use IB to complete schedule banking transactions in
addition to conducting on-line sales and purchasing. This study presents a theoretical model
considered to help researchers and practitioners better understand the commercial bank’s websites,
during the period of June 2007, the results show that nearly 57 percent of the Indian commercial
banks are providing transactional Internet acceptance and adoption of Internet Banking
17
. The proposed model maybe particularly useful in developing nations where

consumers are loath to use Internet Banking even when the services are available.
However, a review of several studies that have investigated consumers’ acceptance of
Internet banking services from a multiplicity of perspectives have not reached a clear
consensus of the factors that contribute to overall consumer acceptance and adoption.
The paper concludes with discussions of the managerial implications and avenues for
future research.
kartikeya bolar (2014)

In their research paper “End-user Acceptance of Technology Interface In Transaction Based
Environment “This paper presents Creators and investors of technology need information
about the customers’ assessment of their technology interface based on the features and
various quality dimensions to make strategic decisions in improving technology interfaces and
compete on various quality dimensions. The research study identifies the technology interface
dimensions as perceived by the end-users in a transaction based environment (viz. Internet
banking) in India, using exploratory factor analysis. The influence of these dimensions on the
utility of technology interface and hence the usage is examined by Structural Equation
Modeling. The moderating role of user demographics and technology comfort is also tested.
Managerial implications are discussed.
Dorra Gherib (2014)

In their research paper titled “Adoption and diffusion of internet banking: case of Tunisian
banking sector “tried to observe the embracing of Internet banking in the Tunisian banking
industry. The aim is to make out factors that accelerate or slow down the implementation
process. The literature review enables identifying a set of variables: organizational, individual
and structural. The research methodology used within this study is the case study. Five case
studies in banking sector were executed. The sample is shaped by banks that adopted the
Internet Baking as a modernization. The analysis allowed the willpower of the related
dimensions of the aforesaid variables (competition, perceived benefits, and organizational
compatibility). Indeed, this research has exposed some variables that hamper the
implementation of technological innovations.
18
Nabil Hussein Al-Fahim (2013)

In his research titled “An tentative Study of Factors distressing the Internet Banking espousal:
A Qualitative Study among Postgraduate Students” tried to find out the factors that affect the
internet banking espousal among postgraduate’ students in International Islamic University
Malaysia (IIUM).Approach- Semi structured interviews with eight informant; four adopters
and four non-adopters on postgraduate’ students were conducted to explore this issue. The
results revealed that adopters and non-adopters realized that internet banking (IB) has quite a
lot of benefits and amenities. However, non adopters were concerned about some factors like
trust, ease of use, awareness and security. The results also showed that adopters had positive
influence on use of online banking and they did not have problems with these factors because
they had sufficient knowledge and experience in using online banking. The findings are
important to enable bank Executives to have a better understanding of clients’ perception to
adopt internet banking. This will help banks’ managers and owners formulate strategies that
could significantly affect IBA among their customers.
Anil Kumar and Manoj Kumar Dash (2013)

In their research paper “Constructing a Measurement in Service Quality for Indian Banks:
Structural Equation Modeling Approach”...The aim of this paper is to construct a measure in
service quality for Indian banks and establishes a causal relationship of service attributes
performance with customer satisfaction. The SERVQUAL model is used. The quantification of
service quality led to the attempt to construct an index. The index is constructed using
Structural Equation Modeling (SEM) and American Customer Satisfaction Index (ACSI) as the
underlying frameworks. The analysis is based on data of 200 bank customers from the Delhi-
NCR. An adapted ACSI is enhanced and improved to accommodate two exogenous constructs.
The results indicate that service quality variables are important antecedents of customer
satisfaction and retention. These antecedents of service quality have a positive significantly
relationship with customer satisfaction. The study concludes with an analysis of how different
dimensions of service quality performance attribute impact on customer satisfactionand
19
retention. Such a framework should provide valuable insights to the bank manager to
identify key service performance indicators and to design more effective and efficient
marketing and management strategies to satisfy their customer.
Shilpi Khandelwal (2013)

In his research titled on “E Banking: Factors of Adoption in India” This paper present
the last decade has witnessed a drastic change in the economic and banking
environment all over the world. With the economic and financial sector reforms
introduced in the country since early 1990s, the operating environment for banks in
India has also undergone a rapid change. Increasingly, more and more people are
switching to electronic platforms for executing financial transactions. Internet banking
has brought about a 360 degree change in the entire banking industry. The wider
usage of cell phone and internet certainly seems to be playing a role in blurring
physical boundaries, and unlocking a whole new world of opportunities for banks in
tapping newer customer segments and in recording greater volume of transactions.
For the banks, technology has emerged as a strategic resource for achieve in higher
efficiency, control of operations, productivity and profitability. For customers, it is the
realization of their anywhere, anytime, anyway banking dream. This has prompted the
banks to embrace technology to meet the increasing customer expectation and face the
tough competition. This research paper is focused on what are the drivers that drive
consumers towards adoption of E banking. How consumers have accepted internet
banking and how to improve the usage rate were the focus of research area in this
study.
Donnelie K Muzividzi, Rangarirai Mbizi & Tinashe Mukwazhe

(2013)
In their research paper “An Analysis of Factors That Influence Internet Banking Adoption
among Intellectuals: Case of Chinhoyi University of Technology“. This paper investigate the
adoption on internet banking has remained sluggish despite the efforts by banks to promote the
technology. The purpose of the research project was to identify the factors that affect the
adoption of internet banking in a bid to construct ways to salvage the situation. The research
20
focused on intellectuals who better understand technology than the general public. Data was
collected using questionnaires and interviews from the population of 5000 students and
academic staff at Chinhoyi University of Technology. A sample of 450 students and staff were
selected from the population. The research identified various factors that impose barriers and
enhance adoption of internet banking. Chief among these were compromised security of
transactions and marketing exposure. It also unearthed the impact of demographic on internet
banking adoption. Two hypotheses were tested, the first one which was meant to determine if
there exist any relationship between age and internet banking adoption. It was concluded that
there is a negative relationship between age and internet banking adoption. The second
hypothesis assumed an association between internet banking and level of education. Education
was deemed a prerequisite in enhancing the smooth adoption of internet banking and henceone
should have a significant level of education to take up the technology. In waging a protracted
war against low levels of internet banking adoption the research concluded banks should rather
concentrate in promoting the product (internet banking). Bank should also institute measures
to guarantee the security of transactions to internet bank users as this remains the stumbling
block to many potentialcustomers.
Ankit Kesharwani & Gajulapally Radhakrishna (2013)

In their research paper “Drivers and Inhibitors of Internet Banking Adoption in India”. This
paper research on different banks is on condition that e-banking services, as this would
revolutionize their profits. Since internet banking in India is still in its nascent stage, it is
essential for e-banking institutions to enhance reception and usage of internet as a banking
channel by their customers. This paper has reviewed the most of seminal studies in the area of
diffusion of innovation and makes an attempt to do an experimental research that looked into
the factors that drives and inhibits internet banking usage in India. An investigative factor
analysis followed by a positive factor analysis has been applied on 362 internet banking users.
Findings resulted in seven factors – perceived benefit, hacking and fraud risk, performance
risk, computer self- efficacy, technology intricacy, social influence, and pricing concerns. The
results suggest that acceptance and usage of internet banking services can turn into a
fundamental concern for future research, as the drivers overcoming the inhibitors over time at
an influencing rate. Moreover, this study also compares the findings with extant diffusion
21
of innovation literature and identified several additional factors that can affect internet
banking adoption in India.
Ms. Fozia (2013)

The purpose of this paper is to determine the customer’s perception toward the e- banking
services. A total of number of customer taken for the study is 196. Analysis of variance
technique is employed to study the significant relationship between the occupation and
customer perception of e-banking services and significant relationship between the age and
customer perception of e-banking services. The result of the study clearly shows that different
age group of customer and different occupation group of customers have different perception
toward the e-banking services. The results also propose that demographic factors impact
significantly internet banking
behavior,specifically,occupationandage.Finally,thispapersuggeststhatandunderstanding about
the customer’s perception regarding the e-banking services of public and private banks it will
help to the banker to understand the customers need in better way.
Jayshree Chavan (2013)

In his research paper “Internet Banking- Benefits and challenges in an Emerging Economy”.
This study presents New Information technology has taken imperative place in the future
expansion of financial services, especially banking sector conversion are affected more than
any other financial provider groups. Increased use of mobile services and use of internet as a
new division channel for banking transactions and international trading requires more
concentration towards e-banking security against deceptive activities. The development and
the increasing progress that is being experienced in the Information and Communication
Technology have brought about a lot of changes in almost all facets of life. In the Banking
Industry, it has been in the form of online banking, which is now replacing the traditional
banking practice. Online banking has a lot of benefits which add value to customers’
satisfaction in terms of better quality of service offerings and at the same time enable the
banks gain more competitive gain over other competitors. This paper discusses some
challenges in an emerging economy.
22
Yitbarek Takele & Zeleke Sira (2013)

In their research paper titled “ Analysis Of Factors Influencing Customers’ Intention To The
Adoption Of E-Banking Service Channels In Bahir Dar City: An Integration of Tam, Tpb And
Pr “ tried to search factors that sway customers’ intention to adopt e-banking service channels
in Bahir Dar city. A theoretical framework was developed by integrating six variables from
theory of premeditated behavior, technology reception model and previous studies. The
findings discovered that attitude, subjective norm, supposed behavioral control, supposed
usefulness and perceived ease of use and supposed risk were significant in affecting users’
intention to use e-banking service channels. The construct perceived behavioral control
emerged as a overriding factor followed by attitudes and professed usefulness in predicting an
individual’s intention to adopt e-banking service channels. Finally, attitude is jointly predicted
by professed behavioral control, apparent usefulness, seeming ease of use and superficial risk
while perceived ease of use contributed more for the dissimilarity in attitude.
Bahram Meihami, Zeinab Varmaghani & Hussein Meihami (2013)

In their research paper “The Effect of Using Electronic Banking on Profitability of Bank“ This
paper deals with Electronic banking is the use of electronic means to transfer funds directly
from one account to another, rather than by check or cash. Through reducing bank costs,
electronic banking can increase bank incomes. In this research the role of electronic banking
(i.e. automated teller machines, bank card, internet bank, telephone bank, point of sale) in
increasing bank incomes is studied. The statistical society of this research is the private banks
staff of Kurdistan province. Based on Cochran formula, the research sample size was estimated
147. The research data was gathered through financial statements, a questionnaire contains 42
questions, and interview. The gathered data was analyzed through descriptive statistics (i.e.
diagrams and frequency distribution tables) and inferential statistics (i.e. ANOVA test, T test,
multiple regressions, Scheffe's test, T Thutong). The research findings shows there is a positive
and strong relationship between electronic banking and its five components (i.e. automated
teller machines, bank card, internet bank, telephone bank, point of sale) with bank incomes.
According to the research findings, the correlation between independent variables (five
components of electronic banking ) and dependent variable (bank charges) is 0/817 and 0/63 of
the dependent variable changes are explained by independent variables. Finally, the research
findings shows automated teller machine (ATM) has the maximum influence on bank incomes
(Beta=0.407) and telephone bank has the minimum influence on bank incomes (Beta=0.103).
23
Rifat O. Shannak (2013)

In their research paper titled “KEY ISSUES IN E-BANKING STRENGTHS AND
WEAKNESSES: THE CASE OF TWO JORDANIAN BANKS “tried to scrutinize
uses mixed method. Research about e-banking has been conducted from different
angles on different topics by a number of researchers. The paper aims to scrutinize the
current status of Jordan’s e-banking industry, make out its strengths and weaknesses,
and use the findings in formulating future recommendations to make a donation to
knowledge in the chosen area. The choice of the topic was informed by previous
studies and experiences of the researcher and his former students from different
countries but currently focuses on the e-banking industry in Jordan. The methodology
used to achieve the research objectives included carrying out interviews with two
local banking executives, a direct opinion poll for banking customers, and the review of the
extant literature. The research commenced by formulating four hypothesis that address the
positive impact of e-banking for both the banks and their patrons. However, an inadequate size
sample was selected due to research boundaries. The point of reference of the paper turned out
to be explanatory and in the direction of being a case study within the Jordanian context. This
exploratory research therefore, focused on three main magnitude of e-banking in Jordan
namely; Infrastructure readiness, behavioral influences, and the regulatory coverage. The
findings indicated that while the infrastructure is advanced in comparison to some of the other
regional examples, it was still below the Western standards. It also has been established that the
Jordanian e-banking is still not trusted enough by the individual clients. Finally, the legal or
regulatory coverage in Jordan was found to be not fully satisfactory yet, although not very
unusual from what exists in some of the most sophisticated country examples that it was
benchmarked with. Some important recommendations to enhance the e-banking industry are
presented, such as; focusing more on the mobile- functionalities and services for being more
advanced than internet services in Jordan, enhancing the broader e-commerce regulations that
are weakening the more advanced local e-banking regulations, and launching local awareness
and familiarization campaigns which could be undertaken by Jordanianbanks.
Basweti Ogachi Kevin, Masese Chuma Benard & Dr. Martin

Onsiro Ronald (2013)
24
In their research titled on “Impact and Challenges of Information Communication Technology
Adoption in the Tanzanian Banking Sector” The banking sector across the globe is embracing
ICT technologies and using as part of business strategy for expansion, revenue increase,
extension of customer network and creating competitive advantage among banking institutions
.This paper is an effort to investigate the impacts and challenges of ICT adoption in the
Tanzanian banks. The population is forty eight respondents, four managers were selected from
twelve banks and out of the 48 questionnaires distributed, 42 were collected i.e. 87.5%
response, purposive sampling was used and the data collected was analyzed using SPSS, the
researcher employed use of mean and standard deviation. The study found out that there is a
need for bankers to educate public in the use of online banking products, invest more into ICT
infrastructure and the government to reduce tax of ICT gadgets. This study recommends that
individual technologies need to be investigated, impact of adopting other individual
technologies, profitability and performance issues should also be investigated to open up and
clear the way for policy and business decisions.
Neeli Prameela, Dr. B. Abdul Azeem & K.V. Geetha Devi (2012)
This study is a challenge to Owing to the high costs occupied in increasing the current
client base, one of the main goals of banks and other monetary services providers,
which operate through the internet, should be to develop customer allegiance in order
to improve the results. To achieve this aim, these companies face most imperative
challenge in providing and maintaining service quality. Service quality is an input of
customer trust which becomes satisfaction and lead to loyalty as an output. But the
research in the development of e-loyalty is scarce and partial. This paper attempts to
accumulate invented story in order to understand the overall structure of the formation
of e-loyalty. The literature reviewed provides underlying patterns of relationships
between e-banking loyalty and its influencing factors. Such understanding is relevant
for academicians and researchers for furthering the work in this field. The insights
into the previous studies, considered for this paper, are discussed and suggestions for
future research areprovided.
Dr. G S Gireesh Kumar, Bijoy A P and Ajimon George (2012)

In their research paper “Effect of Service Quality Dimensions on Adoption of Internet
Banking–An Empirical investigation of Customer’s Perspectives in Kerala”. The purpose of
25
this research is to examine the interrelationship between the IB service quality dimensions and
adoption of IB by customers in Kerala. Using a structured questionnaire, primary data were
collected from 240 IB users from both public sector banks and private sector banks, identified
randomly from various parts of Kerala. It is quite evident that adoption of IB by customers is a
function of various service quality dimensions and extent of adoption is determined by the
level satisfaction on various elements.since it is cheap, convenient and easily accessible.
Findings of the study may assist banks immensely in addressing the user problems and
understanding their perceptions influencing adoption decision.
Alhaji Abubakar Aliyu, Sayf M. D Younus & Rosmaini Bin HJ

Tasmin (2012)
In their research paper “An exploratory study on adoption of electronic banking: underlying
consumer behavior and critical success factors. Case of Nigeria” This paper investigates the
factors that pressure the consumer adoption of Electronic banking in Nigeria and found that
there is a need to conduct research on Electronic banking espousal behavior. The experimental
data were collected from a questionnaire survey of 125 from Bayer University Kano (BUK), in
northern Nigeria. This study examines the relationship between Electronic banking adoption
and the determining factors for critical triumph of Electronic Banking in Nigeria. Hence, the
results show’s that the relevant factors single-minded the adoption of Electronic banking in
Nigeria include the level of its six factors, namely awareness, ease of use, security, cost,
reluctance to change and accessibility. The results of this study show that four factors
examined are significantly important to the espousal of Internet banking in Nigeria. However,
identify ease of use and reluctant to change are found to be insignificant in determining its
adoption. This study provides insightful understanding of academic staff and non academic
staff awareness about Electronic banking adoption in their banking transactions. Banks and
other private sector in Nigeria that are interested in promoting Electronic Banking might find
these findings helpful in guiding theirefforts.
This paper investigates the factors that influence the consumer adoption of Electronic banking
in Nigeria and found that there is a need to conduct explore on Electronic banking adoption
behavior. The experimental data were collected from a questionnaire survey of 125 from
Bayer University Kano (BUK), in northern Nigeria. This study examines the relationship
between Electronic banking adoption and the determining factors for critical success of
26
Electronic Banking in Nigeria. Hence, the results show’s that the relevant factors determined
the adoption of Electronic banking in Nigeria include the level of its six factors, namely
wakefulness, ease of use, security, cost, reluctance to change and accessibility. The results of
this study show that four factors examined are significantly important to the results of this
studyshow four factors examined are significantly important to the adoption of Internet
banking in Nigeria. However, perceive ease of use and reluctant to change are found to be
insignificant in determining its adoption. This study provides insightful understanding of
academic staff and non academic staff perception about Electronic banking adoption in their
banking transactions. Banks and other private sector in Nigeria that are interested in promoting
Electronic Banking might find these findings helpful in guiding theirefforts.
Neetu Jain & DR. Pooja Malhotra (2012)

in their research paper “Demographic Factors Affecting the Adoption of Internet
Banking in India” .The goal of this paper to find out the demographic factors affecting
adoption of electronic banking in general and Internet banking in particular in India.
The data for this study is based upon a survey of bank customers using a convenience
sampling technique with the aid of a structured self-administered questionnaire. The
survey was conducted during the period of April 2012. The results of this study
indicate that age, education, income, and profession are the most influential
demographic variables affecting Internet banking usage. Using a mailed questionnaire
with a response rate of 38.9 per cent, it was found that 40 per cent of the Indian
consumers who responded to this survey were already using Internet banking services.
The results of this study provide interesting additions to knowledge of electronic
banking and contribute to our understanding of Internet banking users as well as
nonusers.
27
28
RIMPI KAUR (December 2012)

In her research titled on “An Impact of IT on Branch Productivity of Indian Banking
in the Era of Transformation” It can research on banking all over the world witnessed
changes during last decade, which perhaps it did not see during its entire history. The
changes are not only confined to developed countries, banking in developing
countries like ours has also witnessed drastic changes. It is due to liberalization of
economies and related policies, globalization of world markets especially because of
increasing interdependence of different developed and developing countries. In this
context of changing environment, the new financial services have been provided with
the support of Information Technology such as transfer of funds across and beyond
the national boundaries. Financial institutions, including banks, all over the worldare,
therefore, crucially dependent on information technology and consequently, it has
become imperative to evaluate the performance of banking industry. The present
paper analyzes the impact of IT on branch productivity and concludes that IT along
with other factors, improving the productivity at an excellent rate and fully IT-
oriented banks are the most beneficiaries whereas partially IT-oriented banks though
proved increase in productivity in the post-e banking period but still not harmonized
with fully IT-oriented banks. The paper also suggests some measures to improve the
branch performance along with better utilization ofIT.
Bindiya Tater, Manish Tanwar, and Krishna Murari (2011)

In their research titled on “CUSTOMER ADOPTION OF BANKING TECHNOLOGY IN
PRIVATE BANKS OF INDIA” This paper explores the perception of Indian customers
towards the use of technologies with respect to such factors as convenience, privacy, security;
ease of use, real time accessibility and accurate record of varied transaction that enable
customer’s adoption of Banking Technology. Other factors such as slow transfer speed,
technical failure, frauds and unawareness among customers that make hindrance in adoption,
are also tested. The results show that demographic variables such as
29
Gender, age, qualification and income play a positive role in adoption of banking
technology. All the banks are using information technology as a strategic vehicle to stay
competitive against other players. There is no significant difference between adoption rates
of banking technologies by the customers of different private banks. The paper also shows
that banking technology helps in increasing customer satisfaction, customer loyalty,
improvised growth, and performance of the banks.
30
RESEARCH
METHODOLOGY
31
INTRODUCTION
Internet Banking an Overview The Indian banking system has undergone a technological
change over time. The banking system in India has created position for itself in the modern
forceful global bubble where adoption of new and innovative technological development
carries the key to additional room of banking business and its future improvement. The
outstanding types of innovation in technology and solid amalgamation with information
communication technology (ICT) prepared an archetype transfer in the Indian banking
industry. Technology itself formed its own world in the global digital economy. Internet
banking is an online system which enable customers or businesses to access their bank
accounts, do their banking transaction online, getting information about banking products and
services. The innovative initiation of internet banking has empowered banks with innovative
ways of delivering their banking services to customers.
Information communication technology (ICT) is becoming an important factor in the future

development of financial services industry, and in particular banking industry. The dynamic
forces behind the rapid renovation of banks are going through certain important changes in
innovations in ICT. The growing applications of computerised networks to banking reduced
the cost of transaction and increased the speed of service to a large scale. In today’s digital
global economy, there is competition around the world in different sector or industry and with
the explosion of new sectors in the present world, banks are changing their strategies to reach
customers worldwide with ease and in a cost effective manner. Therefore banks are adopting
the latest technology in order to deliver their banking and financial service product to the
customers with a cost effective manner.
Now days in order to provide more benefits to customer and to increase the performance of
banks they are adopting the costeffective distribution channel to distribute their financial or
banking service to the customer. Through internet banking banks want to keep the existing
customers as well as to attract new customers for their banks. Internet banking uses the
internet platform or internet services as electronic delivery channel in order to deliver their
banking services such as “2” Chapter 1 balance enquiry, printing statement, fund transfer to
other bank accounts, utility bill payments and so on and new banking services such as online
payment or electronic payment without visiting to bank branches. As banking technology has
32
focused on reducing cost of distribution, internet banking enable customers to go for banking
at a remote place without visiting the bank branches. Now a days manycustomers are
migrating towards the adoption of this distribution channel and in India all most all private
and public banks are providing internet banking service facilities to give more value added
services to their customers.
The objectives of internet banking include cost manage through reduction in operating cost,
performance improvement by making the service available at all times of the day, wider
coverage by enabling the access to service from any location, revenue growth through better
quality and additional non-financial services, and customer convenience through personalized
services. Internet banking infrastructure investment include the promise of transaction cost
reduction by limiting overheads associated with bank staff and bank branch costs and to
provide better services to customers who increasingly desire 24 hour banking.(Khalfan, et al
(2006)).
Internet Banking facilitates a convenient and successful move toward to handle personal
finances, as it is accessible 24 x7 hours without visiting the bank and from any remote
locations. By using the internet platform, for providing banking services, convenience of
customers are taken into account and this not only help the customers but also it increases the
efficiency of the banking operation. It provides a boundary less banking i.e. doing transaction
from anywhere in the world or within anywhere in the country. Internet banking is limited by
operational timings, no geographical barriers and the services can be offered at a very small
cost. Day by day there is an increase in number of users accessing internet in Orissa for other
activities i.e. email, information search etc, the number of financial transactions carried out
over Internet remains low.
It is observed that potential users either do not adopt internet banking or do not use it
continually after adoption. Most of the banks’ websites are getting accessed by huge number
of customers in Orissa but only a very number of customers make online transactions.
Although the use of Internet banking by customers is increasing in India but the adoption rate
of Orissa is slower in comparison to other states as per the views of bankers of Orissa. Due to
the slow adoption rates, the transformation of banking services from ‘bricks and mortar’ to
‘clicks and mortar’ is yet to eventuate to the degree it was supposed to be adopted or
predicted in comparison to the adoption in developed countries Among the customers mind
internet banking is still ranked in less important than the other “3” Chapter 1 financial
33
distribution channels i.e. ATM, Tele banking, branch banking etc. In order to be successful,
banks must understand to what extent customers are adopting or using Internet Banking
services. Banks must regularly monitor the customer’s requirements frequently to understand
the factors affecting their intention to adopt internet banking services. Sathye (1999) found
that consumers will not be ready to change from present familiar ways of banking to Internet
banking unless their specific need is satisfied.
Researchers suggested banks for considering influence of socio economic conditions that
affects income and levels of affluence, and the consumers’ ability to use internet banking need
to be considered. Lee and Lee’s (2001) recent study shows that adopters of Internet banking
tend to be more highly educated, more wealthy and younger with good knowledge of
computers and especially familiarity with internet usage. Venkatesh and Morris, (2000),
investigated gender differences in the overlooked context of individual adoption and sustained
usage of technology in the workplace. Further banks must demonstrate the benefits of Internet
banking.
But due to limited number of studies that have been conducted in understanding users’
adoption, availability of information in this context is found limited in Orissa.In India private
banks were the first to implement internet banking services and the pioneer player exploring
the adaptability of the internet tools in the Indian banking industry. Banks can connect to the
customers at any place and at any time though the internet applications. It is also playing a
major role in marketing strategies resulting in high performance in the banking industry.
Customers get satisfaction from the internet banking system when they derive maximum
convenience and compatibility while transacting online. Banks adopting internet banking
service are very much interested in knowing customers experience to a larger extent than just
finding customer satisfaction.
From this perspective it is very much essential to assess the customers experience for
electronic banking product and services. Customers perceive the internet banking service as
main feature in doing banking and evaluate the service on different parameters like
convenience, 24x7 access, security, trust etc. The relative success of Internet Banking to date
can be gauged by identifying the number of active users and anticipated future adopters. All
major banks have introduced their internet banking services and are constantly investing and
expanding their products and services in Orissa. Privacy, security and Trust are found to be
the most important issues that inhibit customers from using Internet banking in Orissa .Few
34
research or no research have been conducted in Orissa on factors that influence customer’s
attitude and their behavioral intention to use internet banking. This research is an attempt to
know customers “4” Chapter 1 attitude towards internet banking and the findings of this
research study will help the public and private sector bank in developing their marketing
strategies to endorse banking products and services over the Internet in future
Research Problem Statement
In today’s digital world, the use of internet by customer’s are growing rapidly and this has led
to the development of internet banking adopted by the banks all over the world. This techno-
innovation has created competition among the banks to create a competitive advantage over
others. Banks are trying to fulfill the ever changing probability of better performance
expectation from customers and it is fulfilled by adoption of new innovative technology or
improvement in the existing services or technology time to time by the banks. This has lead to
the development of cyberspace banking or internet banking and as consequence the branch
banking becomes less significant. Internet banking has provided customers more control in
doing their banking transaction as well as performing their financial services. Customers have
the control on their transaction as when, what and how much needed. From the bankers view
point few percentages of bank customers are banking online or have banked online earlier in
Orissa. Consumer acceptance of internet banking is not that encouraging figure in
comparisons to other states and also very little evidence is there in understanding of factors
influencing the customers attitude towards adoption of internet banking. The study tries to
understand how socio-demographic characteristics, consumers’ perception such as
compatibility, complexity , perceived risk , cost , social influence (opinions of family, friends,
colleagues) and customers’ attitudes formation towards internet banking persuade the
adoption of internet banking which can allow banks “8” Chapter 1 to know the behaviour and
pattern of online transaction to have a competitive advantage over other banks as well as to
increase fat percentage of market share in internet banking. Orissa lacks behind than others
states in India in knowing factors affecting the customer’s adoption of internet banking and
attitude formation towards internet banking, therefore there is a need for a study of this
temperament and to explore customers banking services behaviour and to assess their
attitudes towards internet banking services. Branch banking is till popular but customer’s
preferences over other channels will change their beahviour radically over the time. .
35
Research Questions
Hence the following questions arise: 1. What are the factors that influence the adoption and
usage of internet banking in Orissa and to find out customers’ attitude towards adoption of
internet banking? 2. What is the relationship between demographic variable and customers’
perception towards internet banking; and, how the customers’ using and not using internet
banking in their perception differs. 3. Why are users not using internet banking services
despite its assured benefits? 4. Do banks communicate key points on security and privacy
measure they have implemented to protect users’ interest? 5. Do banks make efforts to
understand customers’ requirements on a regular basis or to create awareness of their products
and services? 6. How the neural network can bring together the psychometric and
econometric approaches to the measurement of attitudes towards internet banking? 7. What is
the relationship between consumer characteristics i.e. voluntary, technology anxiety and
impulse tendency on the customer attitude towards internet banking? 8. How TAM model
explain customer attitudes towards internet banking. “9” Chapter 1 9. Do the users level of
experience with internet activities have an impact on perceived usefulness which in turn
influence the adoption level This research study will enrich the literature knowledge base in
understanding the factors and providing precious information to banks in designing their
strategy for attracting different customer groups towards the adoption of internet banking and
reducing the operation cost by pulling more customers to internet than the branch banking.
Research Objectives
The major research objectives of the study were • To identify and describe the factors on
their attitude towards adoption of internet banking. • To investigate the effects of perceived
usefulness, perceived ease of use, perceived security and risk on perceived intention to use
mediated through customer attitude in the context of internet banking. • To investigate the
effects of relative advantage, compatibility, traiability, observability and image on perceived
behavioral intention to use internet banking. • To study the effects of voluntary, anxiety and
impulse tendency of customers on attitude towards internet banking. • To study the attributes
that would play a role in the internet banking channel selection behavior of a customer and
36
attitude towards internet banking. • To describe the preferences for various delivery channels
by Internet banking users and non-users and analyze the implementation of technology made
by Indian banking industry and identify various internet banking services/products adopted by
Indian banks. • To explore customer value perceptions in internet banking and bankers’
perspectives on internet banking activities of customers’ and promotional activities taken by
banks in order to promote the internet banking. “10” Chapter 1 • To evaluate the integration
of Technology Acceptance Model(TAM), Theory of Planned Behaviour(TPB), Social
Cognitive Theory(SCT), Institutional theory(IT),and Diffusion of Innovation (DOI) provides
a strong theoretical basis for the examining the customers attitudes towards internet banking
adoption.
Hypotheses of the Study

The following research hypotheses are framed and tested in the present study. H1:
Demographic attributes i.e. age, income, education, gender; marital status and occupation
have no significant impact on attitude towards internet banking. H2: Individuals experiencing
higher coercive pressure and normative pressures, are more likely to adopt internet banking.
H3: There is a significant difference between users and non-users of internet banking with
regard to their perceptions of social influences. H4: Perceived usefulness, perceive ease of
use, perceived self efficacy and perceived security and risk have no significant impact on
attitude towards internet banking. H5: Relative Advantage, Compatibility, Observability,
Trialability and Image have no significant impact on attitude towards internet banking. H6:
Attributes i.e. Voluntary, Anxiety and impulsive tendency have no significant impact on
attitude towards internet banking.
Research Design
Research design is the blue print or comprehensive master plan for the collection,
measurement and analysis of data to arrive at a conclusion. This study is mainly based on
field survey and is exploratory type of study, which is appropriate, when the problem is
difficult to distinguish, since an attempt has been made to describe the customer attitudes
37
regarding the adoption and usage of Internet banking. The sources of data are mainly primary
and the data were collected through tailor made questionnaires from bank customers and
bankers. Literature on technology adoption theories was reviewed and the research
frameworks was modeled that integrated factors that might have an influence on “11” Chapter
1 the customer’s attitudes towards adoption and which will have an effect on the perceived
behavioural intention to use internet banking services by customers’ in Orissa. Hypotheses
were laid down to explore the impact of these factors by means of data collected from sample
from population of Orissa
Research Approach
The purpose of research is to create a better understanding of the actions of individuals,
groups and institutions, and to analyse the influence on each other. Some researcher have
preferred to the positivistic paradigm as ‘quantiatative’ and the phenomenological paradigm
as ‘qualitative’. This study is located within the positivistic paradigm as ‘quantitative’ rather
than the phenomenological paradigm as ‘qualitative’ , as the study intends to gain an
overview of the present situation pertaining to adoption and continual usage of internet
banking services in Orissa. In this study hypothesis were formulated by applying logical
reasoning to the findings of prior studies. These hypotheses are tested with data collected
from a survey using instruments applied in prior studies. An attempt was made to select
samples that represent the characteristics of Orissa population. Further, we observe the
problem domain, internet banking services, as an observer observes the world and remain
neutral through the study. Therefore, this is a positivistic approach
Sample Design
The present study has been conducted in the state of Orissa. The public and private sector
banks were purposely selected for the present study. The sample for the study comprises of
407 bank customers. The population of this study consisted of bank customers in the Orissa
38
across various sectors, industries, employed and unemployed. Customers from different
public and private sectors banks in Orissa were considered as population of research concern.
Population was segregated into several mutually exclusive subpopulations or strata. Stratified
random disproportionate sampling was used .It was decided to collect data from customers in
the different Governmental/ Semi Governmental/ Private Organization/ Private and Public
Sector Banks / Commercial Organizations /Educational institute/ Universities/ATM
counter/Shopping Mall/Insurance/ Businessman/ Small Retail stores etc covering different
district headquarter of Orissa, so that the researcher could delivery survey questionnaires
directly to customers. While selecting the “12” Chapter 1 survey areas emphasis was given on
internet access, educational levels, occupation and income since these factors were found to
produce gap online and offline population. Therefore areas were selected where values for
these factors were at par. Further importance was placed on areas with larger number of
internet banking users. The results from the study can then be weighted i.e. based on the
proportion of the strata to the population and combined into appropriate population estimate.
Stratified random sampling was used to increase a sample’s statistical efficiency, to provide
adequate data for analyzing the various subpopulations or strata and to enable different
research methods and procedures to be used in different strata. With 600 distributed, only 407
filled in questionnaires were received by the researcher with response rate of 67.8 per cent,
complete information were finally retained for the study. Considering different formula for
sample size calculation, survey cost, time requirement, unwillingness of the customers to
provide data and available resources, it was decided to survey 407 subjects for this study
Data Collection methods and Techniques

There are number of approaches for a researcher to undertake data collection and it depends
upon the questions, depth ness and the time period of the research. Depending upon the
research question and objectives, a researcher may choice different method for the study i.e.
Experiment, logituditional study, cross sectional study, survey or case study. In this research
survey method was used as an effective and powerful tool for collecting data on customer’s
attitudes, behaviour and charactertics. The survey is made when a sample of elements is
selected to be representative of the investigated population. Some time it is the only available
option for acquiring information to examine research questions. Considering the benefits of
39
survey methods and its common use in business studies, a survey method was considered
suitable for this study. Empiricial data have to be collected and will be used for analyzing and
finding results.
A structure questionnaire was designed for collecting the empirical data. While preparing the
questionnaire review of literature, results of other researcher and feedback from bankers and
experts in the area of interest were taken into consideration. The empirical data was collected
from customers in Orissa to achieve the research objectives. 7-point likert type scale, ranging
from 1 representing “strongly disagree” to 7 representing “strongly agree”. As part of the pilot
testing initially questionnaire was developed and pre tested on small sample of bank
customers to ensure “13” Chapter 1 the quality of the questionnaire that the questions were
not misleading or confusing to avoid any bias answers. After revision, a final questionnaire
was developed to collect the data. The questionnaire designed consisted of different sections:
first section comprises questions concerning the demographic characteristics of the
respondents, motivation of using internet banking and preference of ranking among banking
services used, the second part consisting of questions regarding frequency of using banking
services ,using branch banking , usefulness of internet banking services and factors
considered for selecting an internet banking account, the third section explore the
respondent’s attitude towards Internet banking.
The demographic characteristics like gender, age, occupation, education level, salary level,
internet experience and so forth. And the factors-related items collected some constructs from
TAM, DOI, SCT, TRA, TPB, IST such as perceived usefulness, perceived ease of use,
perceived risk. Means-end approach and laddering interview technique was used in order to
reveal how different value creating factors are hierarchically structured and related to each
other. Items used for the constructs were adapted from prior research to ensure the content
validity of the scale used.
The scales for perceived usefulness, perceived ease of use, and behavioural intention were
measured using items adapted from the original instrument (Davis, 1989) and subsequent
applications of TAM to internet banking and other technology acceptance studies(Agarwal &
Prasad, 1997;Davis et al., 1989;Luarn & Lin,2004; ; Venkatesh & Davis , 2000; Wang et al. ,
40
2003).Items for the perceived self-efficacy construct were adapted from an original
instrument developed by Compeau and Higgins (1995) and from other studies that have used
self-efficacy as a construct (Tan & Teo,2000; Venkatesh , 2000; Wang et al., 2003). Measures
of perceived risk were adapted from studies on Internet banking (Tan & Teo, 2000) and e-
commerce (Jarvenpaa & Todd, 1997; Lim, 2003).
The total sample size was set at 407 usable responses for data analysis. This study targeted
different district headquarters i.e. Bhubaneswar, Cuttack, Puri etc of Orissa customers with a
observation to include all segments of the population who currently use or be going to to use
Internet banking in the near future and non-users. Questionnaires were given to - people in
employment or self employment or students or businessman or housewife etc. and in the age
group of 20-65 years. The basis was that, perhaps, these members of the general public would
be more inclined to use internet banking. The collected data are tested for reliability / validity
using Reliability /Item analysis with Cronbach Alpha Coefficient.
Tools and Techniques

for Data Analysis and Modeling Survey data was entered into a statistical package, SPSS
(Statistical Package for Social Sciences) for analysis and graphical presentation of the results.
The collected data are first tested for reliability /validity using reliability/Item analysis with
Cronbach’s alpha coefficient using SPSS, frequencies and percentage distributions of
respondents’ demographic information were developed in tables to check that these responses
were representative of the larger population of Orissa. For each research variable was
computed to test for reliability, while factor analysis was used for convergent and discriminat
validity for the variables. Hypotheses were tested using linear regression analysis. Multi-
linear regression analysis was used to test models’ prediction capabilities. To test whether or
not the observed differences of two samples means drawn from independent populations are
significant, is tested through t-test. The use of t-test is made when the population standard
deviation for either population is unknown or when the one or both samples are small (n1
Scope and Limitations

41
The present study is in Orissa. The current study was conducted at one of time and the study
represent slice of time, and does not show how customers’ attitude may change over time.
Further study employing a longitudinal design would ascertain whether or not the customers’
attitude towards adoption of internet banking would change over time. This research provided
a useful snapshot of consumer data, helping to understand the phenomenon of study. There
were limitations arising from the sample used in quantitative study.
The sample size is small looking at a population’s attitude and behavior. Despite these
limitations the present study provides precious insights into the study of internet banking
adoption. The acknowledged limitation of this study has led to suggestion for further research.
Further the scope of the study is limited to Orissa, where adoption of internet banking is at the
early stage and such the results may not be able to generalize in the contexts of developing
countries where it has reached the maturity stage. Lack of earlier researches in this Orissa,
restricted the scope and direction of the present study. Reluctant customers became a problem
at the time of collection of data. In-spite of assurance given on secrecy of the survey some
customers’ did not cooperate due to some apprehensions. Through, sufficient care has been
taken to study the various aspects of the topic, but the study is limited to different cities of
Orissa, therefore leaving scope for further research in this area in future.
42
DATA ANALYSIS
43
44
NEFT
National Electronic Funds Transfer (NEFT) is an electronic funds transfer system
maintained by the Reserve Bank of India (RBI). Started in November 2005, the setup was
established and maintained by Institute for Development and Research in Banking
Technology (IDRBT).[1]NEFT is a facility enabling bank customers in India to transfer funds
between any two NEFT-enabled bank accounts on a one-to-one basis. It is done via electronic
messages. Unlike Real-time gross settlement (RTGS), fund transfers through the NEFT
system do not occur in real-time basis. NEFT settles fund transfers in half-hourly batches with
23 settlements occurring between 8:00 AM and 7:00 PM on week days and the 1st, 3rd and
5th Saturday of the calendar month. Transfers initiated outside this time period are settled at
the next available window. No settlements are made on the second and fourth Saturday of the
month, or on Sundays, or on public holidays.
NEFT facilities are available at 74,680 branches offices of 101 banks across the country (out
of around 82,400 bank branches) as of January 2011, and well as online through the website
of NEFT-enabled banks and work on a batch mode. NEFT has gained popularity due to its
saving on time and the ease with which the transactions can be concluded, This reflects from
the fact that 42% of all electronic transactions in the 2008 financial year were NEFT
transactions.
Process
Detailed process NEFT is as follows

1. Customer fills an application form providing details of the beneficiary (like name, bank,
branch name, IFSC, account type and account number) and the amount to be remitted. The
remitter authorizes his/her bank branch to debit his account and remit the specified amount to
the beneficiary. This facility is also available through online banking and some banks offer
the NEFT facility even through the ATMs.
2. The originating bank branch prepares a message and sends the message to its pooling centre
(also called the NEFT Service Centre).
45
3. The pooling centre forwards the message to the NEFT Clearing Centre (operated by National
Clearing Cell, Reserve Bank of India, Mumbai) to be included for the next available batch.
4. The Clearing Centre sorts the funds transfer transactions destination bank-wise and prepares
accounting entries to receive funds from the originating banks (debit) and give the funds to
the destination banks(credit). Thereafter, bank-wise remittance messages are forwarded to the
destination banks through their pooling centre (NEFT Service Centre).
5. The destination banks receive the inward remittance messages from the Clearing Centre and
pass on the credit to the beneficiary customers’ accounts.
Settlement Timing
NEFT originally settled fund transfers in hourly batches with twelve settlements between 8:00
AM and 7:00 PM on week days. Settlements are closed on the second and fourth Saturday of
the month.In April 2016, the RBI announced that clearance times would be reduced to half-
hourly batches raising the number of settlements per day to 23.
Any transaction initiated after a designated settlement time would have to wait till the next
designated settlement time. As of 2013, all transactions initiated before 5 PM will be settled
on same day. No transactions are settled on weekly holidays and public holidays.
Transaction Timings for NEFT, Monday to Saturday (Except 2nd and 4th Saturday) is 8:00
AM to 6:30 PM. RTGS / NEFT is not allowed on Sundays, second and fourth Saturday of the
month and the declared bank holidays for the calendar year.
Service Charges for NEFT Transactions
The structure of charges is as follows:
Inward transactions at destination bank branches (for credit to beneficiary accounts):
▪ Free, no charges to be collected from beneficiaries
Outward transactions at originating bank branches (charges for the remitter):
▪ For transactions up to ₹10,000 (not exceeding) : ₹2.50 (+ GST)

▪ For transactions above ₹10,000 up to ₹1 lakh (not exceeding) : ₹5 (+ GST)
▪ For transactions above ₹1 lakh and up to ₹2 lakhs (not exceeding) : ₹15 (+ GST)
46
▪ For transactions above ₹2 lakhs : ₹25 (+ GST)
Statistics
928 million National Electronic Funds Transfers (NEFT) transactions worth ₹60
trillion (US$830 billion) were made in 2014-15 as against 661 million transactions worth ₹44
trillion (US$610 billion) the previous year.
References
1. ^ "Overview of Payment Systems in India". Reserve Bank of India. Retrieved 24

January 2015.
2. ^ "FAQ- NEFT System". Reserve Bank of India. Retrieved 23 May 2016.
3. ^ "National Electronic Funds Transfer System - Procedural Guidelines". Reserve Bank of
India. Retrieved 24 January 2015.
4. ^ "NEFT Fund Transfer To Get Faster - NDTV". NDTV. Retrieved 6 April 2017.
5. ^ "NEFT transfer to get quicker as RBI cuts clearance time". The Indian Express. 6 April
2016. Retrieved 6 April 2017.
6. ^ "Digital India: Beyond an aspiration to an imperative", Business Today, 26 February 2016
RTGS
Real-time gross settlement (RTGS) systems are specialist funds transfer systems where the
transfer of money or securities[1] takes place from one bank to any other bank on a "real
time" and on a "gross" basis. Settlement in "real time" means a payment transaction is not
subjected to any waiting period, with transactions being settled as soon as they are processed.
"Gross settlement" means the transaction is settled on one-to-one basis without bundling
or netting with any other transaction. "Settlement" means that once processed, payments are
final and irrevocable.
RTGS systems are typically used for high-value transactions that require and receive
immediate clearing. In some countries the RTGS systems may be the only way to get same
day cleared funds and so may be used when payments need to be settled urgently. However,
most regular payments would not use a RTGS system, but instead would use a
national payment system or automated clearing house that allows participants to batch and net
47
payments. RTGS payments typically incur higher transaction costs and usually operated by a
country's central bank.
History
As of 1985, three central banks had implemented RTGS systems, while by the end of 2005,
RTGS systems had been implemented by 90 central banks.
The first systems that had the attributes of a RTGS system was the US Fedwire system which
was launched in 1970. This was based on a previous method of transferring funds
electronically between US federal reserve banks via telegraph. The United Kingdom and
France both independently developed RTGS type systems in 1984. The UK system was
developed by the Bankers Clearing House in February 1984 and was called CHAPS. The
French system was called SAGITTAIRE. A number of other developed countries launched
systems over the next few years. These systems were diverse in operation and technology,
being country specific as they were usually based upon previous processes and procedures
used in each country.
In the 1990s international finance organizations emphasised the importance of large-value
funds transfer systems which banks use to settle interbank transfers for their own account as
well as for their customers as a key part of a country's financial infrastructure. By 1997 a
number of countries, inside as well as outside the Group of Ten, had introduced real-time
gross settlement systems for large-value funds transfers. Nearly all G-10 countries had plans
to have RTGS systems in operation in the course of 1997 and many other countries were also
considering introducing such systems.
Operation
RTGS systems are usually operated by a country's central bank as it is seen as a critical
infrastructure for a country's economy. Economists believe that an efficient national payment
system reduces the cost of exchanging goods and services, and is indispensable to the
functioning of the interbank, money, and capital markets. A weak payment system may
severely drag on the stability and developmental capacity of a national economy; its failures
can result in inefficient use of financial resources, inequitable risk-sharing among agents,
actual losses for participants, and loss of confidence in the financial system and in the very
use of money.
48
RTGS system does not require any physical exchange of money; the central bank makes
adjustments in the electronic accounts of Bank A and Bank B, reducing the balance in Bank
A's account by the amount in question and increasing the balance of Bank B's account by the
same amount. The RTGS system is suited for low-volume, high-value transactions. It lowers
settlement risk, besides giving an accurate picture of an institution's account at any point of
time. The objective of RTGS systems by central banks throughout the world is to minimize
risk in high-value electronic payment settlement systems. In an RTGS system, transactions
are settled across accounts held at a central bank on a continuous gross basis. Settlement is
immediate, final and irrevocable. Credit risks due to settlement lags are eliminated. The best
RTGS national payment system cover up to 95% of high-value transactions within the
national monetary market.
RTGS systems are an alternative to systems of settling transactions at the end of the day, also
known as the net settlement system, such as the BACS system in the United Kingdom. In a
net settlement system, all the inter-institution transactions during the day are accumulated,
and at the end of the day, the central bank adjusts the accounts of the institutions by the net
amounts of these transactions.
The World Bank has been paying increasing attention to payment system development as a
key component of the financial infrastructure of a country, and has provided various forms of
assistance to over 100 countries. Most of the RTGS systems in place are secure and have been
designed around international standards and best practices.
There are several reasons for central banks to adopt RTGS. First, a decision to adopt is
influenced by competitive pressure from the global financial markets. Second, it is more
beneficial to adopt an RTGS system for central bank when this allows access to a broad
system of other countries' RTGS systems. Third, it is very likely that the knowledge acquired
through experiences with RTGS systems spills over to other central banks and helps them
make their adoption decision. Fourth, central banks do not necessarily have to install and
develop RTGS themselves. The possibility of sharing development with providers that have
built RTGS systems in more than one country (CGI of UK, CMA Small System of Sweden,
JV Perago of South Africa, SIA S.p.A. of Italy and Montran of USA) has presumably lowered
the cost and hence made it feasible for many countries to adopt.
49
How to do RTGS?
Inter-Bank Transfers: RTGS
As we move into the technological era, all our daily transactions have moved online,
including the monetary ones. Money transfer from one bank to another has become far more
convenient with the advent of technologies assisting in a smooth online money transfer from
one banking institution to another. Systems operating under Inter-Bank Transfer, such as,
NEFT and RTGS have made lives easier for those who prefer to make monetary transactions
without having to physically visit a bank and yet have secure and smooth transition in making
and receiving payments. Both NEFT and RTGS are monitored by the Reserve Bank of India.
Definition of RTGS
RTGS or Real Time Gross Settlement is a system where the funds transfer requests are
processed in real time, i.e. as soon as they are received from the remitting bank. Unlike in
NEFT, the funds transfer instructions under RTGS are processed individually on order basis.
So far, RTGS is the fastest and most secure means of funds transfer in India.
Through RTGS an individual can transfer funds from one bank to another within India on an
immediate basis. It is ideally used for high value transactions only. There is a minimum cap of
Rupees two lakhs on the RTGS transactions. For any value below that an individual will have
to resort to NEFT. Although almost every bank offers RTGS facility to its customers, but
RTGS services are not available in all the branches of every bank. There are approximately
100,000 branches across India that offer RTGS services and anyone who is interested in
availing it can check whether their branch offers it, either by asking the branch or checking
the list available on the official website of RBI.
RTGS Charges
All Inter-Bank Money Transfer services have a nominal charge attached to them. In order to
avail the RTGS service you have to pay a certain fee in order to have your order processed.
Charges for every bank vary a little but there is a uniform slab for applying the charge on
payments.
50
The slabs are divided in two brackets:
• Transactions between 2 and 5 lakhs

• Transactions from 5 lakh onwards up to any amount
The RTGS charges follow the same slab with some further demarcations.
• The bracket of 2 to 5 lakhs carries a nominal charge of Rs. 25/- as existing charges for
branch and Rs.5/- for transactions through internet banking channels
• The bracket of 5 lakh and above carries a charge of Rs.50 as existing charges for
branch and Rs.10/- for transactions through internet.
Please note that these charges are exclusive of GST
In order to ensure a smooth transition of funds one has to first understand how to do
RTGS transfer. Here are some tips on how to do RTGS fund transfers:
• Firstly you need to activate your internet banking facility. Contact your bank branch to
do the activation
• Log on to the online web portal of the bank with the ID and password provided to you.
• Go to your profile and select the option of beneficiary.
• Select RTGS from the inter-bank payment options available.
• Select the option provided to add a beneficiary and provide the necessary details such
as name, account number, address and IFSC code of the beneficiary.
• Click the ‘accept Terms of Service (Terms & Conditions)’ button followed by
‘confirm’.
• A high security password is sent to the mobile number as an additional security
measure. Enter this password to authorize the beneficiary.
• The beneficiary added is activated within time ranging from 30 minutes to a few hours
depending upon the bank and security measures. Once the beneficiary account is
activated, the transfers can be done instantly.
• To remit funds to the Inter Bank Payee through RTGS / NEFT select the ‘Inter Bank
Transfer’ link in the ‘Payments/Transfers’ tab.
• Select the Transaction Type – RTGS or NEFT.
51
• The list of beneficiary accounts added is displayed.

• Enter the Amount and select the beneficiary to be credited from the list.
• Click on ‘Accept Terms of Service (Terms & Conditions)’ and confirm.
In case you face any problems, it is advisable to consult your bank and get a representative to
explain to you how to use RTGS funds transfer in order to ensure that there are no mistakes.
Getting to understand how to do RTGS funds transfer is helpful in the long run as everyone
prefers instant money transfers, especially for big payments. In fact the RTGS service has
several benefits. Some of them are as under:
• Saves time. Previously payments of a huge amount were made via demand draft,
which could only be cleared in a period of three days. Now the same can be done
within no time through RTGS
• Saves paper. Without any need for physical documentation, transfers of huge sums can
be made instantaneously.
• There is no threat of money being stolen or cheques being forged, since all the process
is done online.
• Huge sums of money can be transferred easily, making it easier for companies to run
their business smoothly.
• Helps companies manage their business capital in a much better way.
• There are lesser chances of counter-party default.
• This is in turn also ensures a better supplier- buyer relationship, as a huge sum can be
transferred in one go and without any delay.
Before you can initiate an effective RTGS transfer there are certain basic requirements that
you need to meet. The customer will have to furnish the following information to the bank:
• Remittance amount.
• Account details of the remitting customer for debiting the sum.
• Name of the beneficiary bank and branch
52
• The IFSC Number of the receiving branch

• Name of the beneficiary customer
• Account number of the beneficiary customer
• Sender to receiver information, if any
In case where the funds have not been transferred successfully, the remitting customer will be
informed of the same and the amount will be credited back to his account.
All banks provide the customers with an option to reach out to the branch manager if they are
facing any issues with the RTGS services.
COMPARISON BETWEEN NEFT AND RTGS
• Electronic payment systems RTGS, NEFT are maintained by RBI

• Under RTGS, funds transfer takes place on real time basis
• NEFT operates on a deferred settlement basis
RTGS (real time gross settlement) and NEFT (national electronic funds transfer) are
electronic payment systems that allow individuals to transfer funds between banks. Both these
systems are maintained by the Reserve Bank of India. It is applicable only for money transfer
within the country.
Under RTGS, the funds transfer takes place on a real time basis, or in other words, at the time
the request is received. It is one of the fastest interbank money transfer facility available
through banking channels in India. The beneficiary bank has to credit the recipient's account
within 30 minutes of receiving the funds transfer message.
On the other hand, NEFT operates on a deferred settlement basis. Fund transfer under NEFT
is settled in batches as opposed to the real-time settlement process in RTGS. The batches are
settled in hourly time slots.
53
Do you need a bank account? Customers having savings or current account are eligible to
avail NEFT/ RTGS service. Individuals who do not have a bank account can also deposit cash
at the NEFT-enabled branches. However, such cash remittances will be restricted to a
maximum of Rs 50,000 per transaction.
Timings: The RTGS window is available from 8 am to 16.30 pm on weekdays and working
Saturdays. In case of NEFT, currently there are twelve settlements from 8 am to 7 pm.
However, the timings that the banks follow may vary depending on the customer timings of
the bank branches.
Online RTGS can be done only within the mentioned cut off time. In case of online NEFT, if
the transaction is beyond the cut-off time, the funds will be transferred to the beneficiary bank
on the next working day.
Minimum Amount: RTGS facility is meant for large value transactions. For retail
customers, the minimum amount remitted through RTGS is Rs 2 lakh. There is no minimum
amount for funds remitted via NEFT.
When Electronic Transactions Fail: For RTGS transactions, if for any reason - such as
when the account does not exist or is frozen - it is not possible to credit the funds to the
beneficiary customer's account, the money is credited into the sender's account once the
money is received back by the remitting bank. The funds are returned to the originating bank
within one hour or before the end of the RTGS business day, whichever is earlier.
For NEFT transactions, destination banks are required to return the fund to the originating
branch within two hours of completion of the batch in which the transaction was processed.
Charges: NEFT charges don't exceed Rs 25 (excluding service tax) per transaction while for
RTGS it does not exceed Rs 55 (excluding service tax). The charges are typically lower for
internet banking as compared to carrying out the transaction through bank branches.
54
National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) allow
individuals, companies and firms to transfer funds from one bank to another. You can check
the RBI website for a list of NEFT and RTGS-enabled branches of your bank. These facilities
can only be used for transferring money within the country. To opt for these, you need to fill a
form providing your or the beneficiary’s details — name, bank branch where the account is
held, the Indian Financial System Code, a unique code for identifying the branch, and the
account number and type. You have to submit a cheque while opting for this facility. You can
also transfer funds through net banking. These are third-party transfers and the option is
available under the same header on your net banking home page.
How much can be transferred?

There is no ceiling on the minimum or maximum amount that can be transferred
through NEFT. You can even transfer Re 1. However, a minimum of Rs 2 lakh must be
transferred through the RTGS service. There is no cap on the maximum amount, though.
However, banks may restrict the amount you can transfer in one day. For example, HDFC
Bank allows a maximum of Rs 10 lakh to be transferred in a day.
What are the charges applicable?

According to RBI, banks cannot levy any charge for inward remittances or on receipt of
funds. However, it has capped the charges on outward transfers through NEFT and RTGS.For
transfers through the former, you need to pay around Rs 5-25, depending on the amount.
Banks cannot charge more than Rs 5 for any transfer up to Rs 1 lakh, Rs 15 for Rs 1-2 lakh
and Rs 25 for those above Rs 2 lakh. Under RTGS, you have to pay Rs 25 for Rs 2-5 lakh and
Rs 50 for anything above Rs 5 lakh.
How are the two different?
NEFT operates on a deferred net settlement (DNS) basis and settles transactions in batches.
The settlement takes place with all transactions received till a particular cut-off time. It
operates in hourly batches — there are 11 settlements from 9 am to 7 pm on weekdays and
five between 9 am and 1 pm on Saturdays. Any transaction initiated after the designated time
55
would have to wait till the next settlement time. In RTGS, transactions are processed
continuously, all through the business hours. RBI’s settlement time is 9 am to 4:30 pm on
weekdays and 9 am to 1:30 pm on Saturdays. Banks can function within this time frame or
change it. Here, transfers made are quick and can be helpful in emergencies.
What if the amount does not get credited?

If the transaction fails, the beneficiary’s bank must return the amount to your bank within two
hours and the transaction must be reversed. Also, the bank must transfer the amount to your
account within 30 minutes of receiving the same. The process can work quickly for RTGS .
But, in case of NEFT the entire process could take an additional three-four hours.
Difference Between NEFT, RTGS & IMPS

Most individuals use one or the other method of online money transfer in their lifetime. The
convenience of transferring money online helps an individual in making most out of the
modern technology-based banking services. When it comes to transferring money from one
account to another, most banks provide multiple options based on various factors and
customer’s requirements. Currently, banks provide multiple transfer methods such as National
Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Immediate Payment
Service ( IMPS), etc. Based on the value of the transaction, the speed of transfer, service
availability, and other factors, each of the transfer will provide different kinds of features and
flexibility. Though each of them have their own advantages and disadvantages, they provide
flexibility and convenience to the customers. Moreover, many banks have their own digital
wallets to facilitate additional methods of fund transfers online.
56
Basic Difference Between NEFT, RTGS and IMPS
The following table illustrates the basic difference between the fund transfer methods –
7;
57
NEFT RTGS IMPS
Minimum transfer
Rs.1 Rs.2 lakh Rs.1
value
Maximum transfer
No limit Rs.10 lakh Rs.2 lakh
value
One-on-one
Type of settlement Batches One-on-one settlement
settlement
2 hours (subject to cut-

Speed of settlement Immediately Immediately
off timings and batches)
Weekdays: 12 batches
Weekdays: 8:00 a.m. -
between 8:00 a.m. - 6:30
4:00 p.m Saturdays: 9:00
p.m. Saturday: 6 batches
Service availability a.m. - 4:30 p.m Sunday 24/7
between 8:00 a.m. 1:00
and bank holidays:
p.m. Sunday and bank
Unavailable
holidays: Unavailable
Up to Rs.10,000 -
Up to Rs.10,000 -
Rs.2.50 From Rs.10,000
Rs.2.5 From
up to Rs.1 lakh - Rs.5 Between Rs.2 lakh up to
Rs.10,000 up to
From Rs.1 lakh up to Rs.5 lakh - Rs.25 From
Transaction fee Rs.1,00,000 - Rs.5
Rs.2 lakh - Rs.15 From Rs.5 lakh up to Rs.10 lakh
From Rs.1,00,000 up
Rs.2 lakh up to Rs.5 lakh - Rs.50
to Rs.2,00,000 -
- Rs.25 From Rs.5 lakh
Rs.15
up to Rs.10 lakh - Rs.50
Online/Offline Both Both Online
58
Online Fund Transfer Methods in India
Currently, Indians have the access to choose multiple fund transfer methods. The access to
latest technology and an increasing demand for online-based service has left no stone
unturned. From banking and financial institutions to governing bodies, and private businesses,
the immense utilisation of latest technology has helped almost everyone to bridge the gap
between their customer, partners, vendors, etc. Considering the ever increasing number of
online users in India and all around the world, it is certain and undeniable that people like to
transact digitally and prefer to send money online. Online fund transfers are not only fast,
efficient, and convenient, but also useful for accounting and documentation purposes. Unlike
other methods, online transfers are superior in terms of reliability and the cost factor as well.
Irrespective of which system is being used, NEFT, RTGS, or IMPS, they function as robust
fund transfer methods which allow individuals and businesses to transfer money online from
anytime and anywhere in the world. Nowadays most banks provide Net Banking facility to
their customer. By using either a computer or a smartphone with internet, a bank account
holder can use the fund transfer section to access any of the online banking services provided
by the bank.
Types of Fund Transfer Methods
Though there are various systems for online transfer of funds, such as digital wallets, UPI,
etc, NEFT, RTGS, and IMPS are the most common and highly used methods. In order to
initiate a fund transfer, the individual who is transferring the money, also known as the
originator or remitter, is required to have the basic account details of the beneficiary. Details
such as the account number, beneficiary’s name on the account, IFSC , and the branch name
are the most important and essential factors for using any transfer methods. It is the originator
who is considered responsible for ensuring the correctness of the account details used for a
transfer of fund.
Before understanding each of the fund transfer methods and learning the differences between
them, it is essential to learn the basic factors that are involved in each of the payment systems.
These important factors distinguish the online fund transfer methods on various parameters -
• Fund Value - The fund value is essential in determining which of the transfer methods are
available for you. Depending on the value of the fund, the originator will need to choose a
particular transfer method that will cater to his/her requirements. Moreover, in case of a
59
newly registered beneficiary, a limited amount of fund is allowed to be transferred. If you

are new to transferring funds online, it’s best to contact your bank or refer to their website
in order to determine the best possible option of fund transfer.
• Timings (service availability) - There are certain methods of fund transfer that allows 24/7
online transfers while other have specified timings. The latter will allow a remitter to
initiate a fund transfer any time of the day but the funds will settle only during the
availability of the service. There are certain types of fund transfer methods that are not
available during the weekend and public holidays while others operate round the clock
throughout the year. This takes us to the next interesting feature of fund transfer methods.
• Fund Settlement Speed - After considering the fund value, most often an individual will
look into the settlement speed factor. Each of the fund transfer methods come with different
speed of fund settlement speed. Fund settlement speed indicates the amount of time
consumed and the speed at which the funds are settled to the beneficiary's account once it’s
been initiated. In most cases, people largely choose one transfer method over the due to the
speed factor, however, a faster settlement speed is bound to attract additional charges.
• Charges - In accordance with Reserve Bank of India (RBI), banks decide the transaction
charges for each of the fund transfer methods. The charges for purely based on the total
value of the fund, settlement speed, and other features/flexibility offered by the bank.
Moreover, the government levies an applicable service charge for each fund transfer
transaction. Both the originators and the beneficiaries are advised to refer to his/her bank’s
website to obtain the latest list of transaction fees and charges applicable for online
transfers. By following this practice, both the parties can be aware of the payable fee to the
bank and settle the cost accordingly.
• Transaction Limits - As one of the safe banking features and healthy practices, all banking
and financial institutions specify transaction limits on most types of banking and financial
products. RBI regulates the transaction limits and all other factors of fund transfer through
the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).
BPSS is a subcommittee of the Central Board of the RBI and designated for being the
highest authority for making policies pertaining to the payment systems in the India.
Moreover, BPSS is also responsible for supervising all the payment and settlement systems.
All the payment and settlement systems in India are regulated under the Payment and
Settlement Systems Act, 2007 (PSS Act).
60
Though there are various other factors involved in the transfer of funds, these are few of the
most basic and important factors which differentiate one transfer method from the other.
Since each of the factors has a direct impact on the transfer methods, it makes it easy to
understand the differences between the available transfer option.
Online transfer methods are subject to availability based on the customer’s eligibility and
level of access granted by the bank. Additionally, the limits on fund value, timings, settlement
speed, and other factors are a part of the online fund transfer method to provide a positive
experience to the customer when they choose one transfer method over the other. Currently,
NEFT, RTGS, and IMPS are the most popular methods of fund transfer in India, few of the
notable differences between these methods are listed below:
NEFT - The funds transferred under this method are settled in batches (based on Deferred
Net Settlement (DNS) and at a specific time of the day. If the transfer is initiative beyond the
cut-off time specified by RBI, the funds are typically settled on the next working day. At
present, the fund transfer requests under NEFT are processed in twelve batches between 8
a.m. to 7 p.m. on weekdays and six batches between 8 a.m. to 1 p.m. on Saturdays.
Unfortunately, NEFT is not available on Sundays and bank holidays. One of the biggest
advantages of NEFT is the cost-effectiveness, an individual can carry out smaller value
transfers without worrying about the transaction fee and service charges. A smaller fee on the
transfer enables the individual to carry out more payments which make NEFT the most
popular and extensively used method for online fund transfers.
Under NEFT, the transactions can be initiated and settled from the bank account of one
particular bank to another bank’s account throughout India at no additional cost apart from the
standard charges, provided both the banks are a part of the NEFT transfer network (NEFT-
enabled). Though some banks might have their own policies concerning the NEFT service
provided by them, such as restrictions on transferring funds immediately to a newly added
beneficiary, fund value limits restricting the value of transfer beyond a specified limit, etc.,
these protocols are proven to be effective for safeguarding the customer’s financials.
61
RTGS - This type of transfer methods is applicable and available for fund transfers between
Rs.2 lakh to Rs.10 lakh, however, the biggest advantage forRTGS is the fastest/real-time
settlement factor. As soon as the transfer instructions are sent, the fund gets settled almost
immediately. However, in order to take advantage of the RTGS facility, both the originator's
and the beneficiary’s account has to be RTGS-enabled. Even though most banks are a part of
the vast and popular RTGS transfer network facilitated by RBI, individuals are recommended
to either get in touch with their bank directly or refer to their online banking section to
discover their eligibility concerning access to RTGS payment system. The transaction fee
under RTGS is higher than the other methods due to the faster settlement speed performed on
an instruction by instruction basis.
RTGS comes with limits on the minimum and maximum fund value, however, it is efficiently
used in situations where individuals and businesses require immediate settlement of high-
value funds that are well within the specified limits. Efficiency, speed, and reliability factors
are few among the many factors that make RTGS as one the most-sought medium of online
fund transfers.
IMPS - Also known for being one of the popular and fastest methods of fund transfer, IMPS
is used widely across most banks. Unlike other methods of fund transfer that become
unavailable on bank holidays and during off working hours, IMPS functions 24/7 allowing a
fund transfer at any time of the day. Similar to NEFT, IMPS also allows transfer of low value-
funds but what makes it unique is, it immediately settles the funds. NEFT functions as more
or less the combined version of NEFT and RTGS, where remitters are neither worried about
the size of the fund and service availability nor do they have to be concerned about the
settlement speed.
IMPS facility is provided only on the internet and online banking services. Few banks may
offer SMS-based IMPS service to mobile banking users. Many of the digital wallets in India
utilise IMPS services to credit the money from an individual's wallet to his/her bank account.
Though IMPS provides an immediate fund settlement facility, the transaction fees are as low
as NEFT.
62
Things to consider before initiating a fund transfer
• Timings - The timings for each type of fund transfer methods are specific to the bank.
Since NEFT and RTGS are largely based on the bank’s hours of operation, depending on
the location and specific working hours, the service availability may differ for either of the
party involved in the fund transfer.
• GST - GST is applicable on the transaction fee as per the latest norms which are subject to
change.
• Transaction fee - A fee is charged for initiating the transfer and not for receiving the funds.
• Transfer network - The remitter needs to check whether the beneficiary's account is
eligible to receive funds or not since the bank might not be a part of the transfer network.
63
64
SURVEY ON ONLINE BANKING
Accepted internet banking? No of respondents

Yes 05
No 05
Interpretation
Among the respondents 50% of them accept internet banking and

remaining doesnot.
65
Banks No of respondents
Axis Bank 02
HDFC Bank 02
ICICI Bank 01
Dena Bank 01
SBI Bank 01
Kotak Bank 03
Interpretation
Among the respondents 20% of them have account in Axis, 20% of

them have in HDFC, 10% of them in ICICI, 10% of them in Dena,
10% of them in SBI and 30% of them in Kotak Bank
66
Is Electronic banking same as No of respondents

internet banking
Yes 04
No 06
Interpretation
Among the respondents 40% of them accepted and remaining said

No.
67
How often do you use internet No of repondents

banking?
Daily 03
Weekly 03
Monthly 03
Yearly 01
Interpretation
Among the respondents 30% of them uses internet banking daily, 3 of

them weekly, 3% of them monthly and only one yearly.
68
Why do you use Internet banking? No of Respondents

Quick Service 05
Convinient 03
Cost Effective 02
Interpretation
Among the respondents 50% of them use because they get quick
service, 30% use because they are convinent, 20 % use because they
feel it is cost effective.
69
Most important reason to have No. of respondants

internet banking open
Safe and Secure 02
Low Service Charge 04
Curiosity 02
Convinence 02
Interpretation
Among the respondants 20% have it because of safety and security,
40% due to low service charge, 20% due to curiosity, and 20 % due to
convinence.
70
Use of Mobile Banking No of respondants

Yes 04
Unaware about the concept 01
Not Concerned about the security 02
Concerned about security 01
Not Costly 02
Interpretation
Among the respondants 40% of they use mobile banking , 10% of
them are unaware of the concept, 20% are concerned about security,
10% are not concerned about security,20% think it is not costly.
71
Occupation No. of respondants

Employee 03
Business 03
Student 04
Interpretation
Among the respondants 30% are employees, 30% are businessmen,
40% are students.
72
CONCLUSION
73
It is concluded that the service users from the private sector banks are more satisfied
than that of the nationalized banks for providing E-banking services as per
broacher/specification. The service users are not much reliable with the service of good
support to query. Further it is concluded that both the banks keep accurate account records.
Service users are highly and equally satisfied with the services in the nationalized and the
private sector banks. Portability in ATM card service, is excellent service provided by both
the banks and respondents from both the banks are highly satisfied this service.
Further it is observed that service users are not satisfied with the service of generating
alert by bank after updating account balance. Service users satisfactions in private sector
banks are more than the nationalized banks. In general, service users from both the
nationalized and private sector banks are unsatisfied for the service of providing support by
banks for solving their queries. Comparatively, it shows that the respondents from the private
sector banks are more satisfied than the nationalized banks.
Service users are not satisfied from both the banks for good and timely response for
enquires. Further it is seen that the satisfactions from the nationalized and the private sector
banks are same. Further it is concluded that service users from both the banks are unsatisfied
for providing good continuity in services. It is observed that the service users expect more
support via telephone for solving their problems and queries. But as per opinion, existing
services provided by both national and private sector banks are not reliable and sufficient.
Further the service users are not much satisfied for immediate response provided for
queries via internet. It also pointed out that, among all responses 24.72 per cent service users;
responded it ‘very poor’ for that service. Further the private sector banks’ service user’s
responses for immediate support on internet are good. The service users are satisfied for
providing information about new scheme by both the nationalized and the private sector
banks. Further private sector banks satisfaction contribution is more than the nationalized
banks.
Overall satisfaction for better treatment to service users by the banks is unsatisfactory.
But it is seen that in the private sector banks service users are more satisfied for the better
treatment given to account holder as compared to the nationalized banks.
74
AN EVALUATION OF E-BANKING SERVICE USERS IN NATIONALIZED AND

PRIVATE SECTOR BANKS WITH REFERENCE
TO SANGLI DISTRICT
In general it is concluded that while using ATMs, the majority of the respondents are
satisfied with the supported facility of multiple languages. Further it is observed that the
service users found some problems while operating ATMs like- insufficient balance, network
problem. Also, the majority of service users are satisfied with the availability of ATMs at
convenient location.
Among the service users of both the banks ,the private sector banks service users are
more satisfied than the nationalized banks for the convenient location of ATMs. Further it is
concluded that the majority of service users are agreed for- banks return debited cash due to
failure transaction. Balance slips are provided in ATM centre after every successful
transaction.
We conclude that the majority of service users from both the banks opine that banks
don’t charge more for debit card transaction. The service users from both the banks are
unsatisfied for having limitation for withdrawing amount and for providing new card after
few years or some transactions. Further it is observed that, the private sector banks service
users are more satisfied than nationalized banks about card facility services.
It is concluded that, the service users are satisfied with credit services. Also it reflects
that the service users are unsatisfied for affordable interest rate for credit amount charged by
banks. Further it is observed that the private sector banks respondents are more satisfied than
the nationalized banks. The majority of service users from both the banks are unsatisfied with
insufficient timeperiod given for the repayment of credit amount.
Internet Banking
It is concluded that almost all the respondents are satisfied with the high speed of
opening and operating of bank web sites from both the nationalized and the private sector
75
banks. Further good security is maintained in internet banking service. Also banks web sites
support multiple browsers. There is simplicity in operating bank web sites and 24 hours and 7
days availability. Further the majority of the service users are satisfied for having
understandable internet banking demonstration supporting for multiple operations on bank
web sites. is concluded that the majority of service users have not used RTGS services, but
very few service users use the service. Further it is seen that the service users from the private
bank sector are more than the nationalized banks.
It is concluded that the majority of service users from the nationalized and the private
sector banks strongly agreed for the service of sufficient amount transfer (i.e. 91.38 per cent
and 82.50 per cent).
It is observed that very less service charges are applied by the banks for per
transaction of RTGS service. The service users from the nationalized banks are more satisfied
than the private sector banks.
It is concluded that all RTGS service users from the nationalized and private sector
banks are highly satisfied with the time required for fulfilling and completing transaction.
Helpline provided by banks

We conclude that the majority of the service users are unsatisfied with the service of
reliable and right kind of information timely provided by banks. Further, it is observed that
the service users from the private sector banks are more satisfied than the nationalized banks.
Further, as per service user’s opinion, information available on internet is not much
supportive for solving problems. Also the service users are unable to fully understand
frequently asked questions (FAQ) on internet.
It is concluded that the service users are not satisfied with the service for providing
information through e-mails. But the private sector banks service users are more satisfied
than nationalized banks for providing help and latest information through e-mail. The
majority of service users express that the information is not updated time-to-time on bank
web sites. Further it is seen that the private sector banks service users more satisfied than the
nationalized banks service users.
76
Transparency
We conclude that E-banking system provides transparency in transaction. Further, the

researcher is trying to identify upto which extent transparency is maintained. It is observed
that E-banking doesn’t lead 100 per cent transparency in transactions. Transparency lies in
between 90 to 98 per cent for the various types of the transactions. Majority of the service
users are satisfied with transparency in E-banking services (Ref. 4.28)
AN EVALUATION OF E-BANKING SERVICE USERS IN NATIONALIZED AND

PRIVATE SECTOR BANKS WITH REFERENCE
TO SANGLI DISTRICT
Pensioners Information
It is observed that the majority of pensioners prefer to visit bank branch for cash
withdrawal, printing passbook and fund transfer. Very less amongst them are using ATM,
internet and mobile banking services.
General opinion service users

Majority of the service users demand for cash depositing system in each and every
ATM center. They also demand for entering password at the time of swapping card at point
of sale (POS) place .Further almost all service users prefer for biometric security in ATMs
and prefers -thumb, iris, palm and voice as biometric input. Also they wish to provide alert
system before any transaction on their account.
77
BIBLIOGRAPHY
78
1. Sparks, Evan (26 June 2017). "Nine Young Bankers Who Changed America:
Thomas Sudman". ABA Banking Journal. Retrieved 12 March 2019.
2. ^ Cronin, Mary J. (1997). Banking and Finance on the Internet, John Wiley and
Sons. ISBN 0-471-29219-2 page 41 from Banking and Finance on the Internet.
Retrieved 2008-07-10.
3. ^ "The Home Banking Dilemma". Retrieved 2008-07-10.
4. ^ "Computer Giants Giving a Major Boost to Increased Use of Corporate
Videotex". Communications News. 1584. Retrieved 2008-07-10.
5. ^ "Stanford Federal Credit Union Pioneers Online Financial Services" (Press
release). 1995-06-21.
6. ^ https://www.op.fi/op-financial-group/about-us/op-financial-group-in-brief/history
7. ^ "Banking and Finance on the Internet," edited by Mary J. Cronin
8. ^ "Electronic Funds Transfer Act of 1978"
9. ^ https://histoire.bnpparibas/dossier/le-minitel-larrivee-de-la-banque-a-domicile/#
10. ^ Jump up to:a b Abdou, Hussein, English, John and Adewunmi, Paul An investigation
of risk management practices in electronic banking: the case of the UK
banks eprints.hud.ac.uk, University of Huddersfield, July 22, 2014 (PDF; 474 kB)
11. ^ chipTAN (Sicherungsverfahren im Online-Banking) sparkasse-koelnbonn.de,
Sparkasse KölnBonn (AöR), Retrieved on April 10, 2014.
12. ^ DNI electrónico de España/Spanish ID-card
13. ^ Security Flaws in Online Banking Sites Found to be Widespread Newswise,
Retrieved on July 23, 2008.
14. ^ Tatanga Attack Exposes chipTAN Weaknesses trusteer.com, September 4, 2012
15. ^ Trojaner gaukelt Fehlüberweisung vor Heise Security, June 1, 2013
16. ^ Secoder 2.0-SStarMoney starmoney.de, Star Finanz-Software Entwicklung und
Vertriebs GmbH, Retrieved on November 18, 2015.
17. ^ "OCC 2005-35" (PDF). Archived from the original (PDF) on 2007-10-11.
Retrieved 2007-11-01.
18. ^ “High Roller” online bank robberies reveal security gaps European Union Agency
for Network and Information Security, July 5, 2012
79

FULL AND FINAL ONLINE BANKING Last PDF

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

FULL AND FINAL ONLINE BANKING Last PDF

Hochgeladen von

Copyright:

Verfügbare Formate

A STUDY ON NEFT AND RTGS

1st page (Main Page)

A STUDY ON NEFT AND RTGS IN PRIVATE

University of Mumbai for partial completion

Under the Faculty of Commerce

SAMIR CHANDRAKANT DEVLIKAR

Under the Guidance of

DR. BABASAHEB AMBEDKAR COLLEGE

A STUDY ON NEFT AND RTGS IN PRIVATE

University of Mumbai for partial completion

Under the Faculty of Commerce

SAMIR CHANDRAKANT DEVLIKAR

Under the Guidance of

DR. BABASAHEB AMBEDKAR COLLEGE

CHAPTER NUMBER PARTICULARS PAGE NUMBER

02 REVIEW LITERATURE 13-31

03 RESEARCH METHODOLOGY 32-43

04 DATA ANALYSIS 44-72

DR. BABASAHEB AMBEDKAR & ADV.GURUNATH

Name and Signature of

I the undersigned Miss / Mr. SAMIR CHANDRAKANT DEVLIKAR hereby,

Name and Signature of the learner

Name and signature of the Guiding Teacher

I would like to acknowledge the following as being idealistic channels and

I take this opportunity to thank the University of Mumbai for giving me

I would like to thank my Principal,Y. K. THOMBARE for providing the

I take this opportunity to thank our Coordinator MONALISA CARVALHO

I would also like to express my sincere gratitude towards my project guide

I would like to thank my College Library, for having provided various

INTRODUCTION ON ONLINE BANKING

What is Online Banking?

How Online Banking Works

Advantages of Online Banking

Around-the-clock access to banking information provides early detection of fraudulent

Disadvantages of Online Banking

Different types of online financial transactions are:

National Electronic Fund Transfer (NEFT)

Real Time Gross Settlement (RTGS)

Electronic Clearing System (ECS)

Immediate Payment Service (IMPS)

• To sub-serve the goal of Reserve Bank of India (RBI) in electronification of retail

Relationship between a literature review and a research

• A literature review helps to establish the validity of a research project by revealing

National Literature Review

Rakesh H M & Ramya T J (2014)

Amruth Raj Nippatlapalli (2013)

Mr. Vijay Prakash Gupta & Dr. P. K. Agarwal (2013)

Vijay M. Kumbhar (2011)

Pooja Malhotra & Balwinder SINGH (2009)

International Literature Review

Shaza W. Ezzi (April 2014)

. The proposed model maybe particularly useful in developing nations where

kartikeya bolar (2014)

Dorra Gherib (2014)

Nabil Hussein Al-Fahim (2013)

Anil Kumar and Manoj Kumar Dash (2013)

Shilpi Khandelwal (2013)

Donnelie K Muzividzi, Rangarirai Mbizi & Tinashe Mukwazhe

Ankit Kesharwani & Gajulapally Radhakrishna (2013)

Ms. Fozia (2013)

Jayshree Chavan (2013)

Yitbarek Takele & Zeleke Sira (2013)

Bahram Meihami, Zeinab Varmaghani & Hussein Meihami (2013)