INTRODUCTION

The banking scenario in India in the post liberalization and deregulated environment has witnessed
sweeping changes. The tremendous advances in technology and the aggressive infusion of
information technology had brought in a paradigm shift in banking operations. For the banks,
technology has emerged as a strategic resource for achieving 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. Technology to start with is a business enabler and now has
become a business driver. The banking institutions cannot think of introducing a financial product
without information technology support is it customer service, transactions, remittances, audit,
marketing, pricing or any other activity in the banks. Information Technology plays an important
role not only to complete the activity with high efficiency but also has the potential to innovate and
meet the future requirements. Information Technology came into picture as early as in the 1980‟s
in banking industry through the Rangarajan Committee recommendations and banks have given
utmost importance to the technology since the last 25 years. The Reserve Bank of India is
constantly pursuing the banks from 1980‟s to 2 introduce computerization at branch level and to
improve the quality of customer service through technology. E-Banking implies performing basic
banking transaction by customers round the clock globally through electronic media. Alternatively
electronic banking can be defined as “delivery of bank‟s services to a customer at his office or home
by using electronic technology and this has resulted in conceptualization of virtual banking”. In
traditional banking, the customer has to visit the branch of the bank in person to perform the basic
banking operations viz., account enquiry, fund transfer and cash withdrawal. On the other hand, E-
Banking enables the customers to perform the basic banking transactions by sitting at their office
or at homes through PC or LAPTOP. The customers can access the bank‟s website for viewing their
account details and perform the transactions on account as per their requirements. Thus, today‟s
banking is no longer confined to branches. Customers are being provided with additional delivery
channels which are more convenient and are cost effective to the banks. This has resulted in
shrinking of geographical boundaries, easy reach to the clientele, reliable and secure services. The
E-Banking services include Automated Teller Machine, Plastic Card Currency, Internet Banking and
Electronic Clearing Services.

SCOPE
With the advent of liberalization policy and RBI‟s easy norms several public and private 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 17
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.

OBJECTIVES
The following are the specific objectives of the research objectives

1. To analyze the present e-banking scenario in India.

2. To study the extent of awareness and the usage of e-banking services in the study area.
3. To ascertain the customer‟s satisfaction regarding various e-banking services provided by
SBI and ICICI banks .
4. To test the following hypothesis.

Limitations of the Study

The study has some limitations, these limitations that need to be regarding the present study. The
study is restricted to commercial banks located in Chennai only. The study is based on the opinion
survey of customers. But, the opinion expressed may differ according to situation. The findings of
the study canot be generalized as the study is made covering a limited area namely, Chennai of
india.

Research methodology
In a view to precede the research in a systematic way the following research methodology has been
used. By means of obtaining detailed opinion of the customers, this research falls under the
category of descriptive research. This study was conducted as a survey that examined e-banking
practices in SBI and ICICI banks located in Chennai of india.

LITERATURE REVIEW
E-banking is an innovation when new information technologies merge into traditional banking
services. Operating costs minimization and revenue maximization are the major drivers that boost
e-banking services . E-banking service is basically a self-service by customers, so for banks, it
requires less resources and lower transaction and production costs . A study about the e-banking
over application of e-banking can improve banks’ performance in terms of the growth in assets,
reduction in operating expenses and portfolio enhancement . that creating virtual banking will not
only create a new service delivery channel, but also lead to value creation to both banks and
customers further argues that customers will be attracted to e-banking when the advanced e-
banking services like e-transfer and e-bill options are available. Through interviewing banks in a
small island and examining their e-banking In indicates that those banks were using e-banking as
an assurance to their customers to maintain a competitive quality of service. To continually
improve the performance of e-banking services, several core-capacities are critical Planning new IT
infrastructure Enhancing transaction security Providing value-added content Delivering
differentiated services Managing customer relationships The retention and expansion of
relationships with relative older and lower IT awareness customers . Consumers today are much
selective in choosing banking services in terms of their demands and preferences. To be
competitive, banks must develop services to satisfy customers as well as delight them at the same
time. Liao and Cheung (2002) indicate that the most important quality attributes underlying
perceived usefulness of e-banking are expectations of accuracy, security, network speed, user-
friendliness, user involvement and convenience. A basic Electronic Service Quality standard is
developed with four dimensions: efficiency, fulfilment, system availability and privacy . Herington
and indicate that online service quality has no direct impact on customer delight, e-trust or the
development of stronger relationships with customers, but it does have a relationship to e-loyalty.
Their research also indirectly explains the change of households of using online banking service.For
example, in 2003, 91% of US households held bank accounts and 93% of those used at least one
electronic transfer of funds option with their account . However, Fest points out that only 40% of
US households took advantage of e-banking service, whereas over 50% of households that had not
been attracted yet to e-banking because those customers might have had a bad experience on a self-
service site . The winners in e-banking industry are those banks that are able to successfully
enhance their offerings while simultaneously enhancing security measures and getting customers
to believe in them . In addition, for all e-banking customers, customer satisfaction is affected not
only by banks’ service quality, but also by their cultural features E-banking in developing countries
grows rapidly in the past decade Their research indicates that for consumers’ attitudes and
adoption towards e-banking, there were significant differences between the two groups, e-banking
users and non-e-banking users, with respect to demographic profiles, attitudinal properties and
preferences for service delivery channels. For instance, in China, there were only 6000 computers
connected to the internet with 40,000 internet users in 1995, but there were 10.2 million internet-
connected computers and 26.5 million internet users nationwide by the end of June 2001 that one
of the key strategic responses of banks in was to develop e-banking to a more competitive
environment, even under the current condition of lack of practical customer credit system. In
another examine the extent of e-banking and m-banking in China by investigating its market status,
identifying the target customers, the demographic characteristics of users and non- Prestige e-
Journal of Management and Research and comparing their attitudes towards e-banking adoption.
They conclude that there was a low awareness of such services in China, owing to security
concerns, perceived risks, low computer skills and a Chinese tradition of cash-carry banking. The
rise of Internet Banking is also due to its number of benefits for both the provider and the customer
as well. From the bank’s perspective these are mainly related to cost savings and internet banking
remain one of the cheapest and more efficient delivery channels Other rationales for the adoption
of such services are also related to competition as internet banking strategy has been an interesting
way to retain existing customers and attract new ones and to the numerous advantages to banks
for instance, mass customization, more effective marketing and communication at lower costs
amongst others . Benefits for the end users are numerous as well and include mainly conveniency of
the service , lower cost of transaction and more frequent monitoring of accounts among others .
However, it should also be noted that there are still customers who fear to make use of Internet
banking, as they are concerned with security aspects of such a system.