+PROJECT REPORT

ON

“INTERNET BANKING AND ITS EFFECT ON INDIAN CUSTOMERS

POST COVID-19 PANDEMIC”

SUBMITTED FOR THE PARTIAL FULFILMENT TOWARDS THE

AWARD OF DEGREE IN MASTER OF BUSINESS ADMINISTRATION
(2020- 2022)

SUBMITTED TO: SUBMITTED BY:

DR. NARENDER SINGH CHAUHAN ANKUSH KUMAR
ROLL NO.- 20052122122014
MBA 4TH SEMESTER

HIMACHAL PRADESH UNIVERSITY BUSINESS SCHOOL, SHIMLA

HIMACHAL PRADESH UNIVERSITY, SUMMERHILL, SHIMLA-05

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 CERTIFICATE

This is to certify that ANKUSH KUMAR a student of Master of Business administration

specialization in finance and marketing of Himachal Pradesh University Business School has
worked under my supervision and guidance for his project work and prepared a report with
title “INTERNET BANKING AND ITS EFFECT ON INDIAN CUSTOMERS POST
COVID-19 PANDEMIC”.

He has devoted himself to the conduct of this work under my guidance and supervision as per
the stipulated norms of the Himachal Pradesh University and this work has not been
submitted for the award of degree to any other university.

Supervised by:

Place: SHIMLA Dr. Narender Singh Chauhan

Signature of guide

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 DECLARATION

I Mr. ANKUSH KUMAR hereby declare that this project report on “INTERNET
BANKING AND ITS EFFECT ON INDIAN CUSTOMERS POST COVID-19
PANDEMIC” is the record of authentic work is carried out by me. And has not been
submitted to any other university or institute for the reward of any degree etc.

ANKUSH KUMAR

ROLL NO.- 200521221220014

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 ACKNOWLEDGEMENT

While conducting the industry internet Banking oriented project, innumerable people have
given me various suggestions and opinions while conducting the internet Banking oriented
project. I have tried to incorporate all those suggestions which are really relevant in preparing
my final report. I think it is essential to thank all those who have contributed and helped me
throughout the duration of the project.

I am highly indebted to my project guide Dr. Narender Singh Chauhan whose constructive
counselling and able guidance helped me immensely in bringing out this project in the
present form. And lastly the entire faculty members for providing me this opportunity.

The acknowledgement would be incomplete without thanking my family and friends who
were a big support throughout.

ANKUSH KUMAR

ROLL NO.- 200521221220014

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 EXECUTIVE SUMMARY

In this modern competitive world when business is touching new heights, each & every
company of every industry is trying to make maximum utilization of available resources with
an aim of maximizing sales turnover, profits and above all the customer’s satisfaction.

For the deep inclination into the management concepts practical work is an important aspect.
Theoretical knowledge gives us the fundamental concepts of management and practical work
teaches us management tact and skills, which are successfully employed to capture today’s
competitive market. The main objective of Dissertation and Project is getting used to with the
necessary theoretical inputs and to gain sufficient practical exposure to establish distant
linkage between the conceptual knowledge to practical situations. Practical work thus plays
an important role in developing and sharpening one’s skill in the field of business and
management and administration.

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 TABLE OF CONTENTS

Sr. No. Title Page

No.

1. Introduction
6-31
❖ Introduction to internet banking
❖ History and prospective
❖ COVID-19 and its impact on the banking sector

2. Research Design
32-38
❖ Review of Literature
❖ Objective of study
❖ Research Methodology
➢ Sampling Method
➢ Scope of Study
❖ Data Collection
❖ Limitation of the study

3. Data Analysis and Interpretation

39-56

4. Findings, Recommendations and Conclusion 57-61

5. Bibliography/ Annexure 62-65s

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INTRODUCTION

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1.1. BANKING

Banking is an industry that handles cash, credit, and other financial transactions. Banks
provide a safe place to store extra cash and credit. They offer savings accounts, certificates of
deposit, and checking accounts. Banks use these deposits to make loans. These loans include
home mortgages, business loans, and car loans. Banking is defined as the business activity of
accepting and safeguarding money owned by other individuals and entities, and then lending
out this money in order to conduct economic activities such as making profit or simply
covering operating expenses.

Banking is defined as “Accepting of deposits of money from public for the purpose of
Lending or Investment, repayable on demand or otherwise and withdrawable by cheque,
draft, or otherwise”. In simple words, banking can be defined as the business activity of
accepting and safeguarding money owned by other individuals and entities and lending this
money out in order to earn a profit. However, with the passage of time, the activities covered
by banking business have widened and now various other services are also offered by banks.
The banking services these days include the issuance of debit and credit cards, providing safe
custody of valuable items, lockers, ATM services, and online transfer of funds across the
country or world. Banking is one of the key drivers of the U.S. economy. Why? It provides
the liquidity needed for families and businesses to invest for the future. Bank loans and credit
mean families don't have to save up before going to college or buying a house. Companies
use loans to start hiring immediately to build for future demand and expansion.

➢ HOW IT WORKS

Banks are a safe place to deposit excess cash. The Federal Deposit Insurance
Corporation (FDIC) insures them. Banks also pay savers interest rates or a small percent of
the deposit.

Banks can turn every one of those saved dollars into $10. They are only required to keep 10%
of each deposit on hand. That regulation is called the reserve requirement. Banks lend the
other 90% out. They make money by charging higher interest rates on their loans than they
pay for deposits.

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The history of banking began with the first prototype banks which were the merchants of the
world, who gave grain loans to farmers and traders who carried goods between cities. This
was around 2000 BC in Assyria, India and Sumeria. Later, in ancient Greece and during
the Roman Empire, lenders based in temples gave loans, while accepting deposits and
performing the change of money. Archaeology from this period in ancient
China and India also shows evidence of money lending.

Many histories position the crucial historical development of a banking system to medieval
and Renaissance Italy and particularly the affluent cities of Florence, Venice and Genoa.
The Bardi and Peruzzi Families dominated banking in 14th century Florence, establishing
branches in many other parts of Europe.[1] The most famous Italian bank was the Medici
bank, established by Giovanni Medici in 1397.[2] The oldest bank still in existence is Banca
Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating
continuously since 1472.[3]

Development of banking spread from northern Italy throughout the Holy Roman Empire, and
in the 15th and 16th century to northern Europe. This was followed by a number of important
innovations that took place in Amsterdam during the Dutch Republic in the 17th century, and
in London since the 18th century. During the 20th century, developments in
telecommunications and computing caused major changes to banks' operations and let banks
dramatically increase in size and geographic spread. The financial crisis of 2007–2008 caused
many bank failures, including some of the world's largest banks, and provoked much debate
about bank regulation.

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INTRODUCTION TO
INTERNET BANKING

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1.2 INTERNET BANKING

INTRODUCTION

The advent of the Internet has initiated an electronic revolution in the global banking sector.
The dynamic and flexible nature of this communication channel, as well as its ubiquitous
reach, has helped in leveraging a variety of banking activities. Electronic banking, also
known as electronic funds transfer (EFT), is simply the use of electronic means to transfer
funds directly from one account to another, rather than by cheque or cash.

BACKGROUND

Internet banking is the term that describes all transactions that take place among companies,
organizations, and individuals and their banking institutions. First conceptualized in the mid-
1970s.However, the lack of internet users, and costs associated with using internet banking
stunted growth. The internet explosion in the late-1990s made people more comfortable with
making transaction over the web.

HISTORY

While financial institutions took step to implement internet banking services in the mid-
1990s, many consumers were hesitant to conduct monetary transactions over the web. It took
widespread adoption of electronic commerce, based on trailblazing companies such as
America online, Amazon.com, to make the idea of paying for items online widespread. By
2000, 80 per cent of U.S. banks offered internet banking. Customer use grow slowly. At bank
of America, for example, it took 10 years to acquire 2 million e-banking customers. However,
a significant cultural change took place after the Y2K ended. In 2001, bank of America
became the first bank to top 3 million internet banking customers. In October 2001, bank of
America customers executed a record 3.1 million electronic bill payments, totaling more than
1 billion. In 2009, a report by Gartner group estimated that 47 percent of U.S. adults and 30
percent in the United Kingdom bank online.

INTERNET BANKING DEFINITION

• INTERNET BANKING is an electronic payment system that enable customers of a

financial institution to conduct financial transaction on a website operated by financial
institution, such as a retail bank, virtual bank, credit union or building society.

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 Internet banking is also referred as online banking, e-banking, virtual banking and by
other terms.
• Internet banking and or e-banking is an umbrella term for the process by which a
customer may perform banking transactions electronically without visiting a brick or
mortar institution.
• Internet banking is the process of making banking transaction ang paying bills via
internet. Thanks to technology and the internet in particular, people no longer have to
leave the house to shop, communicate or even do their banking.

• Online banking, also known as internet banking, describes online systems that provide
users access to their personal bank account information and functions, including but
not limited to account transactions and balances.

Practically every major bank offers its customers the option to sign up for online banking.
Online banking is increasingly popular with customers thanks to its convenience. The service
helps customers keep track of their spending so that they don’t overdraft their accounts or
spend too much money. Customers can sign into online banking anywhere that they have
internet access and a computer. Some of the financial tasks customers can complete using
online banking include:

• Viewing account balances.

• Researching account transactions.
• Paying bills.
• Transferring money between accounts.
• Obtaining old bank statements.

HOW INTERNET BANKING EVOLVED INTO A MAINSTREAM

FINANCIAL TOOL

In today’s highly technical world, it’s hard to imagine there was once a time when all
banking was conducted at an actual brick and mortar financial institutions. Even
simple account transfer required a trip into the bank.
While today internet banking is filed with amazing innovations, it has not always been
this easy- in fact it took a long time to get this far.

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 • HISTORICAL DEVELOPMENT
The precursor for the modern home internet banking services were the distance
banking services over electronic media from the early 1980s. The term internet
banking became popular in 1980s and referred to the use of terminal, keyboard
and tv to access the banking system using a phone line.
❖ FIRST INTERNET BANKING SERVICES IN THE UNITED STATES
According to “Banking and Finance on internet” edited by Mary j. Cronin, internet
banking was first introduced in the early 1980s in New York. Four major banks-
Citibank, Chase Manhattan, Chemical and Manufacturers Hanover- offered home
banking services. Chemical introduced its pronto services for individuals and small
business in 1983.It allowed individuals and small business clients to maintain
electronic cheque book registers, see account balances and transfer funds between
checking and saving accounts.
❖ FIRST INTERNET BANKING SERVICE IN U.K.
Almost simultaneously with the United States, internet banking arrived in United
Kingdom. The UKs first home internet service known as home link was set up by
Scotland for customer of Nottingham building society in 1983.The system used was
based on the UKs Prestel view link system and used a computer, such as BBC Micro,
or keyboard connected to the telephone system and television set. The system allowed
on live viewing of statement, bank transfers and bill payments.
❖ INTERNET BANKING SERVICES IN INDIA
ICICI bank is the first one to introduced internet banking in 1994 for a limited range of
services such as access to account information, correspondence and recently fund
transfer between its branches. ICICI is also getting into e-trading, thus offering a
broader range of integrated services to the customers.

FEATURES OF INTERNET BANKING

Internet banking facility offered by various financial institutions have many features and
capabilities in common, but also have some that are applicable specific.
❖ The common features fall broadly into several catagories :-
A. A bank customer can perform non transactional task through internet
banking, including :-
I. Viewing account balances.

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 II. Viewing recent transactions.
III. Downloading bank statements, for example in pdf format.
IV. Viewing image of paid cheques.
V. Ordering cheque books.
VI. Download periodic account statement.
VII. Downloading applications for M-banking, E-banking etc.

B. Bank customer can transact banking tasks through internet banking,

including: -
I. Funds transfers between the customers linked accounts.
II. Investment sale or purchase.
III. Loan applications and transactions.
IV. Credit card applications.
V. Resister utility billers and make bill payments.
VI. Financial institution administration.
VII. Management of multiple users having varying level of authority. Transaction
approval process.

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 DIFFERRENT TYPES OF INTERNET BANKING

• CORE BANKING SOLUTION or CBS

Core banking is a banking service provided by a group of networked bank branches where
customers may access their bank account and perform basic transactions from any of the
member branch offices. Core banking is often associated with retail banking and many banks
treat the retail customers as their core banking customers. Business are usually managed via
the corporate banking division of the institution. Core banking covers basic depositing and
lending of money.

Normal core banking functions will include transaction accounts, loans, mortgages and
payments. Banks makes these services available across multiple channels like ATMs, Internet
Banking, mobile banking and branches.

The core banking services rely heavily on computer and network technology to allow a bank
to centralize its record keeping and allow access from any location. It has been the
development of banking software that has allowed core banking solutions to be developed.

❖ HISTORY
Core banking become possible with the advent of computer and telecommunication
technology that allow information to be shared between bank branches quickly and
efficiently. Before the 1970s it used to take at least a day for a transaction to reflect in
the account because each branch had their local servers, and the data from the server in
each branch was sent in a batch to the servers in the data center only at the end of the
day.

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❖ ADVANTAGES
1. Centralized accounting.
2. Centralized product control and monitoring.
3. Introduction of technology-based service.
4. Centralized customer account management.
5. Advantages to head office.

• ATM BANKING
ATM’s full form is Automated Teller Machine which is a self-service banking outlet.
You can withdraw money, check your balance, or even transfer funds. Different banks
provide their ATM services by installing cash machines in different parts of the country.
You can withdraw money from any of these machines irrespective of whether or not you
are an account holder in the same bank. Make banking more convenient with ATMs and
debit cards.
❖ Convenient self service
o Deposits- cash and check deposits can be made at most BBVA compass ATMs.
o Withdraw funds- the cash you need when you need it.
o Transfer funds- move funds between checking accounts and savings accounts
that are linked to your debit card.
❖ Customizable
o Fast cash- set standard ATM withdrawal amount.
o Receipt option- set whether or not you will receive receipt when you make
transaction.
o Preferred language- choose between English or Hindi.

• DIGITAL BANKING
Nowadays, we find ourselves carrying cold hard cash less and less because you can just
as easily make your purchase with payment cards, and track your spending online. Plus,
its more secure than carrying 350 to buy the latest iPad.
Certain payment or loyalty cards also let you earn reward or entries to contests, but they
do add up. They make your wallet unnecessarily thick and heavy. Perhaps it is time to
swap the system again; this time, for something that you have always been carrying
around: your smartphone.

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 Digital wallet can help take you there. They are smartphone apps that hold your payment
and loyalty card information. Google wallet and apple passbook are two of the more
popular one we often hear about, but if they are not your fancy, there are plenty of other
digital wallets that carry perks and benefits that you may prefer.
1. Google wallet
2. Apple passbook
3. Phone pay
4. Google pay etc.

• DIGITAL CASH
Digital cash act much like real cash, except that its not on paper. Money in your bank
account is converted to a digital code. Digital cash is a system of purchasing cash credits
in relatively small amounts, storing the credits in your computer, and then spending them
when making electronic purchases over the Internet. Theoretically, digital cash could be
spent in very small increments, such as tenths of a cent (U.S.) or less. Most merchants
accepting digital cash so far, however, use it as an alternative to other forms of payment
for somewhat higher price purchases. There are several commercial approaches to digital
cash on the Web. Among these are e-Cash from Digicash and Cybercash.

• NEFT
National Electronic Fund Transfer (NEFT) is a nation-wide payments system that allows
transfer of funds from one bank’s account to another. With an increased focus on online
banking, NEFT has become one of the most popular ways of transferring funds. Since it
can electronically transfer funds from any bank branch to any individual, it has eliminated
the need to visit a bank branch for transfer of funds. Let us learn about the how NEFT
operates in India and what benefits it offers. Let us find out what is NEFT.

• MOBILE BANKING
Mobile banking is a service provided by a bank or other financial institution that allows
its customers to conduct financial transactions remotely using a mobile device such as a
smartphone or tablet. Unlike the related internet banking it uses software, usually called
an app, provided by the financial institution for the purpose.

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 Mobile banking is usually available on a 24-hour basis. Some financial institutions have
restrictions on which accounts may be accessed through mobile banking, as well as a
limit on the amount that can be transacted. Mobile banking is dependent on the
availability of an internet or data connection to the mobile device.

• E-TAX
This is a facility provided to the taxpayers to make income tax payments through internet
using net-banking facility. You can, if; a) You have a bank account with net-banking
facility, and b) Your bank is amongst the banks that provide the e-tax payment facility.

ADVANTAGES OF INTERNET BANKING

• 24/7 ACCOUNT AND SERVICE ACCESS

Online banks are accessible 24/7, as long as you have an internet connection. Some online
banks, such as Ally Bank, take this perk one step further, giving you 24/7 phone access to
a real-life customer service agent. This can be extremely helpful if you don’t have access
to the internet, or if you feel you need the assistance of a human brain, rather than a
computer algorithm.

• SPEED AND EFFICIENCY

If you need to transfer money, apply for a new loan, or perform nearly any banking
transaction, you’ll typically have to wait in line at a bricks-and-mortar banking location.
With an online bank, there’s never any waiting. As long as you can log in, you can access
your accounts, request a new credit card, or perform nearly any banking transaction you
desire without driving down to a bank or waiting in line.

• ONLINE BILL PAYMENT

One of the great advantages of online banking is online bill pay. Rather than having to
write checks or fill out forms to pay bills, once you set up your accounts at your online
bank, all it takes is a simple click — or even less, as you can usually automate your bill
payments. With online bill pay, it’s easy to manage your accounts from one central source
and to track payments into and out of your account.

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• LOW OVERHEAD CAN MEAN LOW FEES
Online banks don’t have to pay for things like electricity, janitorial services, landscaping,
or rent, so they can pass those savings along to customers. Typically, this means that
online banks can charge fewer fees than traditional banks. For example, most online
banks offer a free online checking account with no deposit, along with other no-fee bank
accounts, such as IRAs. There are a number of online banks with free checking and no
minimum balance

• PLACING ORDERS FOR BANK PRODUCTS

Internet banking also allows you to place orders for bank products like cheque Books and
Bank Cards. You can order primary and add-on debit cards and even apply for credit
cards and priority passes for international airport lounge access (if applicable).

DISADVANTAGES OF INTERNET BANKING

• TECHNOLOGY ISSUE
In many ways, an online bank is only as good as your — or their — internet connection.
If there’s a power outage, or if servers go down, you might not have any access to your
account whatsoever. While some banks offer a phone number for customer service, it
might be overwhelmed if online access is down. With a real bank, you can always find
someone to talk to in the branch.

• SECURITY ISSUE
While many online banks are reputable and well-established, sometimes it can be hard to
feel comfortable with a bank that doesn’t have a physical presence, particularly when
large sums of money are involved. If a website suddenly folds up, what will happen to
your money? There’s also the risk of identity theft — or actual theft — if someone gains
unauthorized access to your account via a hacked or stolen password or log-in credentials.

• INEFFICIENT AT COMLEX TRANSACTIONS

Online banks might be able to transfer money between accounts or pay bills, but you
might be more comfortable with an international, bricks-and-mortar bank if you have
complex transactions. Worldwide, business-oriented banks like Chase have global
transaction capabilities, such as the ability to send payments to more than 35 different

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 currencies worldwide, that online banks might not be able to muster. Without a real-world
presence, most online banks can’t even offer the services of a notary public, which
require an in-person visit and necessary for most important financial transactions like
buying a home.

• INCONVENIENT TO MAKE DEPOSITE

It might seem counterintuitive that a bank, whose purpose is to attract assets, makes it
hard for customers to make deposits, but that can be true in the case of some online
banks. With an online bank, you can’t simply drop off cash or a check at a local branch.
In fact, some online banks, like Ally Bank, won’t accept cash deposits at all. Using Ally
Bank as an example, to make a deposit you’ll have to mail a check, transfer money from
another bank or another account, or use the bank’s e-check deposit service.

SECURITY ISSUE OF NET-BANKING

Banking via the Internet is an easy way to monitor your business’s finances, allowing you to
view payments and deposits on demand. This easy access to financial accounts makes
Internet banking a common target for hackers and other online criminals, however.
Understanding the security issues relating to Internet banking can help you keep both your
personal and business accounts safe from intruders.

• Passwords
The key to protecting your Internet banking account is protecting your password.
Using a strong password -- one that contains mixed-case letters, numbers, and even
symbols if the bank allows it -- will decrease the likelihood of a hacker cracking the
password and gaining access to your account. You should also ensure that the
password to access your company’s accounts is not the same as any other password
you use, since not every site maintains the same level of security a bank does. If a
hacker manages to steal a password from an insecure site, he can access any account
that password unlocks.

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• Phishing
One of the primary methods a hacker gains access to account information is through
phishing, or tricking the victim into giving up the information voluntarily. A hacker
might send an e-mail or even call, pretending to be a representative of the bank and
informing you about some irregularities with your account. All you need to do to sort
things out is to provide your password or other account information to verify your
identity. If you ever receive a communication that appears to be from your bank and
requests this type of information, contact your bank by phone immediately. Do not
give out account information to a caller, and do not click any links provided in any e-
mails that claim to be from your bank. You should also ensure that any employees
with access to the company’s accounts follow the same procedures.
• Keyloggers
Keyloggers are malware programs that record keystrokes and other data, allowing a
hacker to capture your password as you enter it. Maintaining up-to-date antivirus
suites on your company computers can prevent these malicious programs from
gaining a foothold, and setting up your network’s firewall to monitor outgoing traffic
can help you determine when an infection occurs. Many keyloggers and viruses use
email to travel from computer to computer, so adding anti-virus protection to your
company’s email server can help filter out these attacks.

INTERNET BANKING IN INDIA- GUIDELINES BY RBI

The guidelines issued were reviewed and uniform guidelines for all the cooperative banks are
now issued in supervision of past guidelines issued to UCBs in the matter.
All StCBs, DCCBs and UCBs that have implemented Core Banking Solution (CBS) and
drifted to Internet Protocol Version 6 may offer internet banking (view only) facility to their
customers, without prior approval of RBI.
In case any service offered under view only facility requires two-factor authentication or One
Time Password (OTP)
Facility is strictly for non-transactional services such as balance enquiry, balance viewing,
account statement downloads, request for supply of cheque books, etc. and no online fund-
based transactions are allowed.
StCBs, DCCBs and UCBs who wants to give internet banking with transactional facility must
get RBI approval with the conditions that capital adequacy ratio is not less than 10 per cent.

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 • The guidelines issued were reviewed and uniform guidelines for all the cooperative
banks are now issued in supervision of past guidelines issued to UCBs in the matter.
• All StCBs, DCCBs and UCBs that have implemented Core Banking Solution (CBS)
and drifted to Internet Protocol Version 6 may offer internet banking facility to their
customers, without prior approval of RBI.
• In case any service offered under view only facility requires two-factor authentication
or One Time Password (OTP)
• Facility is strictly for non-transactional services such as balance enquiry, balance
viewing, account statement downloads, request for supply of cheque books, etc. and no
online fund-based transactions.

RISKS INVOLVED IN INTERNET BANKING

A major driving force behind the rapid spread of E-banking all over the world is its
acceptance as an extremely cos effective delivery channel of banking services as compared to
other existing channels. However, Internet is not an unmixed blessing to the banking sector.
Along with reduction in cost of transactions, it has also brought about a new orientation to
risks and even new forms of risks to which banks conducting i-banking expose themselves.
Regulators and supervisors all over the world are concerned that while banks should remain
efficient and cost effective, they must be conscious of different types of risks this form of
banking entails and have systems in place to manage the same. An important and distinctive
feature is that technology plays a significant part both as source and tool for control of risks.
Because of rapid changes in information technology, there is no finality either in the types of
risks or their control measures.

❖ Operational risk
Operational risk, also referred to as transactional risk is the most common form of risk
associated with i-banking. It takes the form of inaccurate processing of transactions, non-
enforceability of contracts, compromises in data integrity, data privacy and
confidentiality, unauthorized access / intrusion to bank’s systems and transactions etc.
Such risks can arise out of weaknesses in design, implementation and monitoring of
banks’ information system. Besides inadequacies in technology, human factors like
negligence by customers and employees, fraudulent activity of employees and crackers /
hackers etc. can become potential source of operational risk. Often there is thin line of

22
 difference between operational risk and security risk and both terminologies are used
interchangeably.

❖ Security risk
1. Internet is a public network of computers which facilitates flow of data / information
and to which there is unrestricted access. Banks using this medium for financial
transactions must, therefore, have proper technology and systems in place to build a
secured environment for such transactions.
2. The risk of data alteration, intentionally or unintentionally, but unauthorized is real in
a networked environment, both when data is being transmitted or stored. Proper
access control and technological tools to ensure data integrity is of utmost importance
to banks. Another important aspect is whether the systems are in place to quickly
detect any such alteration and set the alert.
3. Non-repudiation involves creating a proof of communication between two parties, say
the bank and its customer, which neither can deny later. Banks’ system must be
technologically equipped to handle these aspects which are potential sources of risk.

❖ System architecture and design

1. Choice of appropriate technology is a potential risk banks face. Technology which is
outdated, not scalable or not proven could land the bank in investment loss, a
vulnerable system and inefficient service with attendant operational and security risks
and also risk of loss of business.
2. Many banks rely on outside service providers to implement, operate and maintain
their 45 e-banking systems. Although this may be necessary when banks do not have
the requisite expertise, it adds to the operational risk. The service provider gains
access to all critical business information and technical systems of the bank, thus
making the system vulnerable. In such a scenario, the choice of vendor, the
contractual arrangement for providing the service etc., become critical components of
banks’ security.
3. Approaches to reduce security related operational risk are discussed in detail in
Chapter-6. These include access control, use of firewalls, cryptographic techniques,
public key encryption, digital signature etc.

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❖ Reputational risk
1. 1 Reputational risk is the risk of getting significant negative public opinion, which may result
in a critical loss of funding or customers. Such risks arise from actions which cause major loss
of the public confidence in the banks' ability to perform critical functions or impair bank-
customer relationship. It may be due to banks’ own action or due to third party action.
2. Other reasons include losses to similar institution offering same type of services
causing customer to view other banks also with suspicion, targeted attacks on a bank
like hacker spreading inaccurate information about bank products, a virus disturbing
bank’s system causing system and data integrity problems etc.
3. Possible measures to avoid this risk are to test the system before implementation,
backup facilities, contingency plans including plans to address customer problems
during system disruptions, deploying virus checking, deployment of ethical hackers
for plugging the loopholes and other security measures.

❖ Legal risk
1. Legal risk arises from violation of, or non-conformance with laws, rules, regulations,
or prescribed practices, or when the legal rights and obligations of parties to a
transaction are not well established.
2. Given the relatively new nature of Internet banking, rights and obligations in some
cases are uncertain and applicability of laws and rules is uncertain or ambiguous, thus
causing legal risk.
3. In the enthusiasm of enhancing customer service, bank may link their Internet site to
other sites also. This may cause legal risk. Further, a hacker may use the linked site to
defraud a bank customer.
4. Other reasons for legal risks are uncertainty about the validity of some agreements
formed via electronic media and law regarding customer disclosures and privacy
protection. A customer, inadequately informed about his rights and obligations, may
not take proper precautions in using Internet banking products or services, leading to
disputed transactions, unwanted suits against the bank or other regulatory sanctions.

❖ Money laundering risk

1. As Internet banking transactions are conducted remotely banks may find it difficult to
apply traditional method for detecting and preventing undesirable criminal activities.
Application of money laundering rules may also be inappropriate for some forms of

24
 electronic payments. Thus, banks expose themselves to the money laundering risk.
This may result in legal sanctions for non-compliance with “know your customer”
laws.
2. To avoid this, banks need to design proper customer identification and screening
techniques, develop audit trails, conduct periodic compliance reviews, frame policies
and procedures to spot and report suspicious activities in Internet transactions.

❖ Cross border risk

1. Internet banking is based on technology that, by its very nature, is designed to extend
the geographic reach of banks and customers. Such market expansion can extend
beyond national borders. This causes various risks.
2. If a bank uses a service provider located in another country, it will be more difficult to
monitor it thus, causing operational risk. Also, the foreign-based service provider or
foreign participants in Internet banking are sources of country risk to the extent that
foreign parties become unable to fulfil their obligations due to economic, social or
political factors.
3. Cross border transaction accentuates credit risk, since it is difficult to appraise an
application for a loan from a customer in another country compared to a customer
from a familiar customer base. Banks accepting foreign currencies in payment for
electronic money may be subjected to market risk because of movements in foreign
exchange rates.

❖ Strategic risk
1. This risk is associated with the introduction of a new product or service. Degree of
this risk depends upon how well the institution has addressed the various issues
related to development of a business plan, availability of sufficient resources to
support this plan, credibility of the vendor (if outsourced) and level of the technology
used in comparison to the available technology etc.
2. For reducing such risk, banks need to conduct proper survey, consult experts from
various fields, establish achievable goals and monitor performance. Also, they need to
analyze the availability and cost of additional resources, provision of adequate
supporting staff, proper training of staff and adequate insurance coverage. Due
diligence needs to be observed in selection of vendors, audit of their performance and
establishing alternative arrangements for possible inability of a vendor to fulfil its
25
 obligation. Besides this, periodic evaluations of new technologies and appropriate
consideration for the costs of technological upgradation are required.

❖ Other risks
1. Traditional banking risks such as credit risk, liquidity risk, interest rate risk and
market risk are also present in Internet banking. These risks get intensified due to the
very nature of Internet banking on account of use of electronic channels as well as
absence of geographical limits. However, their practical consequences may be of a
different magnitude for banks and supervisors than operational, reputational and legal
risks. This may be particularly true for banks that engage in a variety of banking
activities, as compared to banks or bank subsidiaries that specialize in Internet
banking.
2. Liquidity Risk arises out of a bank’s inability to meet its obligations when they
become due without incurring unacceptable losses, even though the bank may
ultimately be able to meet its obligations. It is important for a bank engaged in
electronic money transfer activities that it ensures that funds are adequate to cover
redemption and settlement demands at any particular time. Failure to do so, besides
exposing the bank to liquidity risk, may even give rise to legal action and reputational
risk.
3. Risk of unfair competition: Internet banking is going to intensify the competition
among various banks. The open nature of Internet may induce a few banks to use
unfair practices to take advantage over rivals. Any leaks at network connection or
operating system etc., may allow them to interfere in a rival bank’s system.

DRAWBACKS OF INTERNET BANKING

Despite the fact Internet banking has come to revolutionize the whole way the banking is
transacted in modern times, it is not free from criticism. Following are some of the
drawbacks of Internet banking:

1. Needs a computer: - In order to use the Internet banking services, the user needs a
computer and time to log onto the website of the bank. This means that the target clientele
is restricted to those who have a home PC or can access the net through the office or
cyber cafes. The customer has to pay every time to check the balance. This can be done
free at an ATM.

26
2. Restricted use: - Another drawback of Internet banking is that it is not possible that all
transactions can be carried out electronically. Many deposits and some withdrawals
require the use of postal services, which can be slow and reliable even in developed
economies.

3. Unreliable Communication facility: - The use of Internet banking requires the use of
uninterrupted telecommunication facility. Where phone connections are not perfect and
where on a home PC the modem often gets disconnected, frequent and tedious log-on
becomes necessary.
4. Slow Browsing: - often it becomes frustrating to browse the Internet to be able to access
the host of financial products that are made available in the website of the bank.
Navigating around web sites on home computers is often slow and frustrating. Pages take
inordinately long time to load and, as Internet users have a particularly low irritation
threshold; a few frustrated attempts could put the user off, quite seriously.

5. Lack of Trust: - The use of Internet banking services depend much on the trust reposed
by the customers of a bank on the Internet banking initiative of the bank. It is therefore
becoming an imperative that Internet start-ups gain the trust of depositors before they will
make deposits. Customers may get less protection that with established banks.

6. Absence of Validity: Absence of necessary legal framework for recognizing the validity
of banking transactions is another impediment for the Internet banking.

27
INTRODUCTION TO COVID-19

First of all, the news of the Novel Coronavirus outbreak came from Wuhan City, China, on
31 December 2019. This coronavirus is a new human virus that has not yet been identified.
Literature suggests that the Coronavirus is a large family of disease-causing viruses. This
disease may lead to more serious respiratory syndrome due to a common cold. In order to
combat COVID-19, beginning on March 24, 2020, the Indian Government declared a
complete lockdown in the region, which was extended to 3 May 2020.

Many governments around the world have taken a similar measure. The timely action taken
by Indian Prime Minister-Narender Modi and many others in the form of lockdown has been
appreciated by WHO as it seems to be the best option to stop the spread of the virus in the
absence of any cure or vaccine for this disease. Transnational institutions such as the IMF and
the World Bank, central banks of different countries, economists, fund managers and
consultancy firms, however, have expressed fear of the disastrous effects of lockdowns on
GDP worldwide in general and emerging economies such as India in particular. The IMF
published its global growth forecasts on April 14, for example, revealing that the global
economy is projected to fall into the worst recession since the Great Depression in the 1930s
in 2020, which may be even worse than the Global Financial Crisis. As the global economy is
affected by the COVID pandemic, the worst recession since the Great Depression in the
1930s, the IMF has estimated 1.9 percent GDP growth for India in 2020. The Indian
lockdown would have a major effect on the economy, according to KPMG, mainly on
demand, which is the largest component of GDP. It notes that a decrease in urban
transactions could lead to a sharp drop in the consumption of non-essential goods. In
addition, the growth rate in India is estimated to be between 1.5 percent and 2.8 percent,
according to the World Bank's assessment. In addition, many other industries, including
banks, NBFCs, MSMEs, hospitality, civil aviation, agriculture and the allied market, are also
affected by the lockdown and pandemic. However, different opinions on the impact of the
Pandemic were given by different experts and authorities; Covid-19 triggered a lockdown on
the current position and future of the Indian Financial Sector, mainly on banks and NBFCs.
Therefore, the influx of information has puzzled investors, depositors, borrowers and other
stakeholders of high significance in this market.

28
IMPACT OF COVID-19 IN BANKING SECTOR:

It is obvious that Banking systems and financial institutions are integral parts of the economy
& Banking systems & the seamless functioning of these sectors is important for an economy
to grow. With the lockdown imposed to contain the spread of the coronavirus, banks are
taking required safety measures to safeguard their staff and customers. Banks across the
country have changed the timings of their branches, reduced staff. Banks are also pushing
people to use digital channels instead of visiting the branch to maintain social distancing.

COVID-19 continues to take a toll on lives and the economy globally & the BFSI sector in
India is heavily impacted. India continues to stand in the top list & number two in the top 5
countries that are impacted by the Covid-19 virus. As per recent industry reports the BFSI
domains adversely impacted are: Non-Performing Assets (NPA), Banks Loan, Stressed
Assets, Net Interest Margin (NIM) & Current and Saving Ratio (CASA).

Digital Journey of Indian Banks

Now digital services became a primary & necessary part of banking operations as Banks
needed to keep up with the changes and introduce new innovations that made end user-
friendly services convenient & reliable & this will allow banks to retain & grow their
customer base. In India, the initial phase of digitization started in the early 1980s, when
information technology was selected & used to perform basic functions like customer-
service, recordkeeping, gradually as per bank requirement, core banking solutions were also
introduced & adopted to improve customer experience.

The major shift came in the early 1990s when liberalization opened the Indian market to the
global world.

The major Private and International banks came into actual operations and boosted
technological changes in the banking sector. Features like Online banking, NEFT, IMPS
(Immediate Payment Service), RTGS (Real Time Gross Settlement), telebanking enabled
customers to avail banking facilities from anywhere in the world

Due to the evolution of digital platforms, banking and financial services have undergone a
massive shift in their mode of operations & financial integrity.

New trends are gaining momentum at a fast pace as the customers. The Digital Engagement
Hub to enable personalized customer experiences across channels, applications, and devices.

29
& Payment Services modernization to address growing business transactions are
requirements of the Bank. The emergence of financial technology has resulted in the
induction of several technological advancements in the industry. Fintech companies &
players, internet banking, and mobile banking are just a few examples. We can see the latest
trends that are shaping new dimensions in the Indian banking and financial sector.

Mobile Banking:

Almost a decade back, even though digital services came into the picture, it was only done
through desktop computers which means the customer must be at home or at a place with a
computer and internet connection. But the vast penetration of smartphones created a need
among customers to avail banking services on their mobile phones. Due to an increase in the
mobile subscriber’s base in rural & urban India Mobile banking is now the preferred way of
banking.

Unified Payment Interface (UPI)

UPI is now a customer requirement and trend that emerged in the last couple of years and it is
revolutionizing & amplifying the way we pay and receive money by transactions.
Transactions are done within seconds using this UPI interface. Google Pay and BHIM
(Government of India) are two major interfaces among numerous other services that enable
easy payment even if someone is not carrying physical cash.

Blockchain Technology

A blockchain essentially can be viewed as a digital ledger of transactions that is duplicated

and distributed across the entire network of computer systems on the blockchain. Each block
in the chain contains a number of transactions, and every time a new transaction occurs on
the blockchain, a record of that transaction is added to every participant’s ledger. The
decentralized database managed by multiple participants is known as Distributed Ledger
Technology (DLT). Blockchain is a technology that is still in the development phase.
Security is a major factor as far as digital services are concerned. Despite technical advances,
fraud practices are still a challenge in the digital domain. Blockchain is the answer to these
challenges & issues. The blockchain technology works on computer science, data structures,
and cryptography.

30
NITI Aayog (Govt of India) is creating India Chain, India’s largest blockchain network,
which is expected to revolutionize several industries including BFSI, reduce the chances of
fraud, enhance transparency, speed up the transaction process.

Artificial Intelligence (AI /ML) / Robots

In the last couple of years, many private sectors and nationalized banks have started to make
use of chatbots systems (virtual agents) which use Machine Learning models & algorithms or
Artificial Intelligence (AI) robots for assistance in personalized customer support. This will
be more matured & in practice in the coming years & one of emerging trends & this is one of
the growing trends.

31
 CHAPTER-2
RESEARCH DESIGN

32
LITERATURE REVIEW

Past research related to channel adoption has identified a number of demographic,

psychological, attitudinal and behavioral factors. Today’s banking sector in India has laid
down greater emphasis on technology and innovation. Banks began to use technology to
provide better quality of services at greater speed. The Internet Banking is becoming one of
the fastest growing technologies that are playing a significant role in the satisfaction of
banking customers. Internet Banking and Mobile Banking made it convenient for customers
to do their banking from geographically diverse places. Banks also sharpened their focus on
rural markets and introduced a variety of services, geared to the special needs of their urban
and rural customers. The online Banking services are changing the banking industry and are
having the major effects on banking relationships. At present many of the banks around the
world have web presence in form of Online Banking services, Support services etc. In the
world of banking, the development in information technology has an enormous effect on
development of more flexible payment methods and more- user friendly banking services.
Electronic Banking services are new and the development and diffusion ofthese technologies
by financial institutions is expected to result in more efficient banking system to users and
also bankers. Since last decade of 20th century, online banking affected more the traditional
banking system. Online banking is a modem tool in the hands of banks in order to provide
banking services to customers. The researcher has gone through the various literature in order
to get insight in to the research problem. At the same time he has tried to find out the gaps in
research so as to bridge the gap through this research. The forgoing writing highlights the
earlier research work undertaken by eminent scholars. Several studies have been made
regarding this topic in the past.

Prema C (2011), in this study majority of the respondents have computer and internet access
and they are also mostly proficient in using them. The users of internet banking, tele banking
and mobile banking are in general found to be spending more hours using computers and
internet than non-users of these services. The hours of computer usage, the frequency of
internet usage and hours of internet browsing were found to be significantly higher among
users as compared to non-users of technology enabled banking selfservice. It concludes that
banks can target those customers whose usage of computers, internet and other technology
products are relatively on the higher side.

33
Singh P (2013) analyzed the problems faced by customers while using e-banking facilities in
India. It observed that most of the customers know about the e-banking services offered by
their bank. The study found that there is a significant difference amongst different problems
identified while using e-banking services. It also found that some problems affect more and
some problems affect less in use of banking services. It concluded that all the reasons are not
equally responsible for not using e-banking services

Pawan Kumar Verma (2022) found that e-banking plays an important role in the protection
of citizens after the COVID-19 era. Both types of people using E-banking sound secure in the
online payment of the COVID-19 virus. Not only is it less expensive and more effective, it is
also a healthy way to do business during pandemics, since it reduces danger at several levels.
The essence of banking services can indeed remain the same, but the way they are delivered
has changed drastically. The important point is that citizens ought to be technically sound so
that they can make good use of the e-banking facility. Banks should also generate trust in the
minds of customers that e-banking is safe. Articles on e-banking should be promoted through
newspapers, TV, internet ads and other media regularly. E-banking awareness camps should
be organized by expert banking officials in the colleges, societies and organizations.

Singh &Bodla, (2020) In order to resolve the COVID-19 pandemic, the Indian Government
announced complete lockdown in the nation starting on March 24, 2020 and in the
subsequent process the equivalent was extended to the third of May, 2020. Despite the fact
that the lockdown was crucial and inevitable to prevent the faster spread of the Novel
Coronavirus (Covid-19) and to save the lives of the nation's citizens, the numerous divisions
of our economy were seriously affected. To the above, the Banking and Non-Banking Money
Organizations (NBFCs) that are the backbone of India's economy are not special cases. This
article is an attempt to assess the effects of this pandemic on banks and NBFCs due to the
lockdown that has resulted in every industry association, educational foundations, public and
private workplaces, suspension of transport methods, and so on.

Salamah, (2017) Assess the noteworthiness of electronic framework coordinates within the
account management section for providing customers with comfort management and the
overall effect of electronic administration on bank transactions. The investigation found that
electronic services led to the expansion of both the bank's monetary movement and the
number of its customers.

34
Syeda & Prasad, (2012) Examines online banking's need for protection. It shows that the
privacy and security points of view should be strengthened in order for online banking to
continue to expand. The future of electronic banking could be extraordinarily affluent with
the security and privacy problems solved. Long-term digital banking would be a framework
where consumers can be worry-free to communicate with their banking institution, and banks
operate under a single standard.

Ingle A and Pardeshi R (2012), has indicate that users were influenced by factors such as
quick direct access, ease of use, anytime anywhere banking, status symbol, safety and
security. The influence of the factors varied from the type of users. Consumers have different
levels of competency in internet banking usage. The higher the consumers felt about their
competency in handling internet banking, higher was their frequency in usage of internet
banking. Moderate and novice of internet banking users had relatively lesser levels of usage
satisfaction.

35
2.1. OBJECTIVE OF THE STUDY

❖ To understand the concept of genesis and concept of internet banking.

❖ To analyze the importance, functions, advantages and limitations of internet
banking.
❖ To explain different forms of internet banking and to analyze the rules and
regulations regarding internet banking guided by RBI.
❖ To highlight on the security problems of internet banking and how to reduce
the security issue with the help of security control tools.
❖ To analyze the trend of internet banking with the help of primary data.
❖ To understand the customer dependency upon the e banking services after the
COVID-19 pandemic
❖ To understand the customer behavior and the e-banking sector and the
comparison between them (pre and post COVID-19)
❖ To analyze the present e-banking scenario concerned with ATM, internet
banking, mobile banking, credit card, debit card, fund transfer and other e-
banking services.
❖ To examine the impact of ATM, internet banking, mobile banking and credit
cards on customer satisfaction by analyzing the problems faced by the
customers.
❖ To find out the various factors impacting or influencing the customer behavior
on E-banking services.
❖ To find out the financial effect of Covid-19 on the e-banking sector.

36
2.2. SCOPE OF THE STUDY

1. This study was focusing upon only on selected E-Banking Services in the State of
Himachal Pradesh.
2. The study of acceptance and satisfaction of various E-Banking services in other
regions of India would give better picture of E-Banking adoption at National level.
3. A comparative study can also be undertaken on E-Banking adoption among public
sector, private sector and foreign banks offering E-Banking services in India.
4. A detailed study can be carried out to identify the Information Communication
Technology (ICT) risks involved in the delivery of E-Banking services for better
adoption of E-Banking services.

2.3. RESEARCH DESIGN

The research carried out by me is a descriptive type of research in which the main objective
was to find out the consumer behavior about internet banking and its impact during the phase
of Covid 19. And also, whether the customer prefers internet banking or not. If yes what are
the reasons behind this?

DESCRIPTIVE RESEARCH: -

Descriptive research is defined as a research method that describes the characteristics of

the population or phenomenon that is being studied. This methodology focuses more on the
“what” of the research subject rather than the “why” of the research subject.

2.4. SAMPLE SIZE AND SAMPLE TECHNIQUE

The primary data have been collected through a survey with a pre-tested structured
QUESTIONAIRE on a sample of randomly selected 80 people in which some are college
students, business persons, service holders, working women and some people who belong to
20-60 age group. From 80 respondents 60 use internet banking and data collected from those
people are used to analysis the trend of net-banking after the covid 19 pandemic.

37
2.5. DATA COLLECTION METHOD

➢ Primary source: -The study is used on both Primary and secondary data. For the
purpose of case study primary data have been collected from the people through
email surveys.

QUESTIONNAIRE: -questionnaire is a set of question prepared for taking data

from people of a certain area. In a questionnaire, a pretested set of questions are
taken for survey.

➢ Secondary source: -The secondary data have been collected from different
articles and website resources such as www.wikipedia.com, www.google.co.in and
so many others. Apart from this I also followed my supervisor instructions to finish
the project.
2.6. LIMITATIONS OF THE STUDY
The major limitations of the study are: -
❖ The small size of 80 respondents is taken to primary data analysis. So, I cannot
draw proper interfaces about the respondents from this sample size.
❖ I have not used modern statistical tool to analysis of data.
❖ Due to shortage of time, I have not been able to make a depth study.
❖ I could not collect data from outside of. Himachal Pradesh
❖ The study is based on prevailing respondents` satisfaction. But their satisfaction
may change according to time, fashion, need etc.

38
 CHAPTER-3
DATA ANALYSIS
AND
INTERPRETATIONS

39
 ➢ PROFILE OF ANALYSIS
For analysis, a survey was conducted for the project “Internet Banking & Its Effects
on Indian Customers Post Covid-19 Pandemic”. This analysis was done on the
basis of 80 respondents from various sectors.
Mainly the objective of the research is to understand internet banking users’
behaviors, opinions, preferences and expectations after the covid 19 pandemic. The
questions were designed in such a way to cover all the relating fields. The fieldwork
and data analysis were conducted by me after consulting with my supervisor and with
the help of my friends. I am very much grateful to them.
3.1. DATA ANALYSIS AND INTERPRETATION:
➢ Gender basis analysis:
Data analysis in respect of respondents

GENDER RESPONDENTS PERCENTAGE

MALE 48 60%
FEMALE 32 40%
TOTAL 80 100%

Chart Title

50

40

30

20

10

0
Gender

Male female

INTERPRETATION:

During the research, the data is collected from 80 respondents among which 48
respondents are males and 32 respondents are females.

40
 ➢ Age basis analysis:

AGE GROUP FREQUENCY PERCENTAGE FREQUENCY

CUMMULATIVE

BELOW 20 18 22% 18

20-35 54 68% 76

ABOVE 35 8 10% 80

AGE WISE CATEGORIZATION

10%
22%

Below 20
20-35
Above 35

68%

INTERPRETATION:

Out of 80 respondents 18 respondents belongs to the age group of below 20 years, 54

respondents belong to the age group of 20 years to 35 years and 8 respondents are above
the age of above 35 years.

41
 ➢ Occupation bases analysis:

OCCUPATION FREQUENCY CUMMULATIVE PERCENTAGE

FREQUENCY
STUDENT 47 53 66%

EMPLOYED 18 69 20%

UNEMPLOYED 15 80 14%

OCCUPATION ANALYSIS

UNEMPLOYED 15

EMPLOYED 18

STUDENT 47

0 5 10 15 20 25 30 35 40 45 50

STUDENT EMPLOYED UNEMPLOYED

INTERPRETATION:

Among 80 respondents,47 are students, 18 are employed and 15 are unemployed.

42
 ➢ Educational profile:

EDUCATIONAL FREQUENCY PERCENTAGE CUMMULATIVE

QUALIFICATION FREQUENCY
HIGHER 11 14% 11
SECONDARY
GRADUATE 17 21% 28

POST- 44 55% 72
GRADUATE
OTHERS 8 10% 80

EDUCATIONAL PROFILE

Others 8

Post Graduate 44

Graduate 17

Higher Secondary 11

0 5 10 15 20 25 30 35 40 45 50

Higher Secondary Graduate Post Graduate Others

INTERPRETATION:

Among 80 respondents, 14% are HS pass,21% are graduate, 55% are post
graduate and 10% others.

43
 1. How often do you use internet per day?

INTERNET USE FREQUENCY PERCENTAGE CUMMULATIVE

RATE FREQUENCY
ONE HOUR 6 8% 6

TWO HOURS 17 21% 23

THREE HOURS 24 30% 47

MORE THAN 33 41% 80

THREE HOURS

INTERNET USE RATE PER DAY

One hour
8%
More than three Two hours
hours 21%
41% One hour
Two hours
Three hours
Three hours
More than three hours
30%

INTERPRETATION:

Among 80 respondents 41% use internet more than three hours per day, 30% use
internet three hours per day, 21% use internet two hours per day and 8% use internet
one hour in a day.

44
 2. In which bank do you have an account?

NAME OF THE FREQUENCY PERCENTAGE CUMMULATIVE

BANK FREQUENCY
SBI 18 23% 18
AXIS 14 18% 32
ICICI 12 15% 44
UCO 11 14% 55
HDFC 8 10% 63
PNB 7 8% 70
OTHERS 10 12% 80

PREFERABLE BANKS

18

14

12
11
10

8
7

SBI AXIS ICICI UCO HDFC PNB OTHERS

BANKS

INTERPRETATION:

Among 80 respondents, 18 respondents have SBI bank a/c, 14 have AXIS bank a/c, 12
have ICICI bank a/c, 11 have UCO bank a/c, 8 have HDFC bank a/c, 7 have PNB bank
a/c and 10 have others bank a/c.

45
 3. Do you avail the banking facilities online?

USERS FREQUENCY PERCENTAGE CUMMULATIVE

FREQUENCY
ONLINE 74 8% 74
BANKING USERS
OFFLINE 6 21% 80
BANKING USERS

Online and offline banking users

8%

92%

Online Banking Users Offline Banking users

INTERPRETATION

Among 80 respondents, 92% of the respondents are using internet banking services
while the 8 % of the respondents are still using the traditional banking services or
offline banking.

46
 4. How frequently do you use internet banking services during covid 19
pandemic?
USE OF FREQUENCY PERCENTAGE CUMULATIVE
INTERNET FREQUENCY
BANKING
DAILY 14 19% 14
WEEKLY 19 24% 33
MONTHLY 31 32% 64
OCCASIONALLY 10 14% 74
NEVER 0 0% 74

Use of Internet Banking during COVID-19 phase

35

31
30

25

20 19

15 14

10
10

0
0
Daily Weekly Monthly Occasionally Never

INTERPRETATION:

Most of the people do not need the services of bank regularly. They may transact with
banks on monthly basis, weekly or occasionally. This chart shows the habit of people in
case of use of internet banking.

47
 5. Why do you avail of internet banking?

PURPOSE OF FREQUENCY PERCENTAGE CUMULATIVE

INTERNET FREQUENCY
BANKING
PRIVACY 7 9% 7
24*7 BUSINESS 20 27% 27
HOURS
CONVINIENCE 12 16% 39
NOT TO MOVE 11 15% 50
ANYWHERE
EASY TO USE 13 18% 63
SAVING TIME 9 12% 72
& SPEED
HARD TO SAY 2 3% 74

BENEFITS SEEN BY CUSTOMERS

20
20
18
16
14 13
12
12 11
9
10 7
8
6
4 2
2
0

benefits

INTERPRETATION:

Most of the respondents felt that the “24*7 business hours” provided by the internet
banking is the highest motivational factor for an individual to use internet banking and
rest prefers “privacy”, “convenience” and “not to move”.

48
 6. Do you find internet banking useful during COVID-19 Lockdown?

RESPONSE FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
YES 67 91% 67

NO 3 4% 70

NOT SURE 4 5% 74

Usefulness of Internet Banking during Covid 19

pandemic

5%
4%

Yes
NO
Not Sure

91%

INTERPRETATION:

Among 74 respondents, 67 finds that the internet banking services were useful during
the COVID-19 phase, although 3 respondents find them not useful, and 4 respondents
are not sure about the usefulness during the COVID-19 pandemic.

49
 7. Do internet baking services assist you in maintaining the precautionary
measures required to avoid the effects of COVID-19?

RESPONSE FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
YES 52 70% 52

NO 6 8% 58

NOT SURE 16 22% 74

Yes No Not Sure

22%

8%

70%

INTERPRETATION:

During the research, the 70% of the respondents finds internet banking services helpful
to maintain the precautionary measures required to avoid the effects of COVID-19.

50
 8. What are the challenges you have faced with the internet banking services
during the COVID 19 Phase?

ISSUES FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
APP CRASH ISSUES 18 24% 18

TRANSACTION FAILURE 16 22% 34

ISSUES
DIFFICULTY IN 19 26% 53
REACHING CUSTOMER
SUPPORT
OTHER ISSUES 9 12% 62

NO ISSUES 12 16% 74

ISSUES FACED DURING COVID-19

PHASE

19
20 18
16
15
12
9
10

0
App crash Transaction Difficulty in Other issues No issues
failure reaching
customer
support

INTERPRETATION:

During the research, it is found there are different issues faced by the customer during
COVID-19 phase including app crash, transaction failure, difficulty in reaching
customer support and other issues.

51
 9. Which type of internet banking services have you used the most during the
COVID-19 Lockdown?

SERVICE USED FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY

MONEY 15 20% 15
TRANSFER

BILLS PAYMENT 19 26% 34

AND RECHARGES

ONLINE 22 30% 56
PURCHASES

ACCOUNT 11 15% 67
OVERVIEW

OTHER SERVICES 7 9% 74

Most used service by customers

Other services
9% Money transfer
20%

Account Overview
15%
Money transfer
Bills payment and Bills payment and recharges
recharges
Online purchases
26%
Online purchases Account Overview
30%
Other services

INTERPRETATION

The majority of respondents use internet banking services to make online purchases,
followed by bill payment, money transfer, account overview, and other services.

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 10. What do you think that after the COVID 19 Lockdown, your use of internet
banking services is _______?

EFFECT FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
INCREASE 41 55% 41

DECREASE 20 27% 61

DON’T KNOW 13 18% 74

Use of internet banking services

18%

55%
27%

Increase Decrease Don’t know

INTERPRETATION

It is witnessed that the majority of the respondents, around 55% of the respondents
agrees that their use of net banking services has increased after the covid 19 phase.

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 11. After facing the difficult phases of COVID-19 lockdown, what do you think
internet banking is better substitute of traditional banking system?

ONLINE FREQUENCY PERCENTAGE CUMULATIVE

BANKING FREQUENCY
BETTER
SUBSTITUTE

YES 53 72% 53

NO 16 21% 69

CAN`T SAY 5 7% 74

Preference of net banking

CAN`T SAY
7%
NO
21%
YES
YES NO
72% CAN`T SAY

INTERPRETATION:

It was witnessed that most of the respondents preferred using internet banking over
there traditional banking system. Thus, internet banking has a bright future ahead.

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 12. Do you prefer internet banking over cash transactions if the transaction
amount is more than Rs.1000/-?

RESPONSE FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
YES 51 69% 51

NO 7 9% 58

CAN’T SAY 16 22% 74

PREFERNCE
Yes No Can't say

22%

9%

69%

INTERPRETATION:

During the research, 69% of the respondents prefer to use internet banking services if
the transaction amount is more than Rs.1000/- while 22% are not sure about the same
and the 9% respondents not prefer to use internet banking services if the transaction
amount is more than Rs.1000/-.

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 13. Please rate your internet banking experience till now.

RATINGS FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
EXCELLENT 17 24% 17

VERY GOOD 26 36% 43

GOOD 19 27% 62

AVERAGE 12 13% 74

POOR 0 0% 74

VOTE FOR INTERNET BANKING

0%
13%
24%
EXCELLENT
VERY GOOD
GOOD
27%
AVERAGE
POOR

36%

INTERPRETATION:

The satisfaction level of people with the internet banking services of their banks has a
mixed review. This may due to multiple reasons. However, the majority of the
respondents have GOOD to EXECLLENT experience with the net banking services
offered.

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 CHAPTER- 4
FINDINGS,
CONCLUSIONS &
SUGGESTIONS

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4.1. THE MAJOR FINDINGS OF THE PRIMARY SURVEY ARE: -

➢ This study received 80 responses. Among these, 74 people said they perform internet
banking services.
➢ 33 out of 74 people use the internet more than three hours a day.
➢ E-banking is mostly used by people who are between 20 and 35 years old.
➢ It is interesting to see that most of the people having accounts in SBI, AXIS, and
ICICI banks. But SBI has more customers than others.
➢ 24*7 business hours is the main benefit which internet banking users have seen
among other options.
➢ Among 74 respondents, 52 respondents find the net banking services are helpful in
maintaining the precautions necessary to avoid Covid-19.
➢ Most of the users have no requirement for daily or monthly base transactions, they
prefer monthly base transaction.
➢ This study revealed that during the COVID-19 lockdown, customers face many
challenges with internet banking services such as net banking app crash issues,
payment failure and difficulty in contacting customer support.
➢ Out of 74 respondents, 53 respondents accept that the internet baking is a better
substitute of the traditional banking.
➢ Most of the respondents claim that their use of internet banking service is increased
after the COVID- 19 pandemic situation so it clears that there is a positive impact of
COVID -19 on internet banking services as customers become habitual of the use of
internet banking services.
➢ Majority of the respondents claims that they would prefer to use to do the transaction
through net banking if the amount of the transaction is more than Rs.1000/-.
➢ By the data collected from the respondents it clears that the Indian customers are
aware of the benefits of internet banking services and its user are increasing rapidly
after the Covid 19 phase because of the many challenges faced by the customers with
the traditional banking system during the lockdowns due to spread of covid 19 virus
which forces the Indian customers to adapt the e banking services.

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4.2. CONCLUSION AND LIMITATIONS: -

In a country like India, there is need for providing better and customized services to the
customers. Banks must be concerned about the attitudes of customers with regard to
acceptance of internet banking. The importance of security and privacy for acceptance of
internet banking has been noted in many earlier studies and it was found that people claim
that they have knowledge about security issues but they have no clear idea about all kind
frauds. The present study shows that customers are aware of the internet banking services and
they found the services very helpful as they have faced the situation of COVID-19
Lockdowns which forces them to use the net banking services which are available 24/7 with
them, also there are many challenges faced by them with the internet banking services and
banks should also focus on them to provide better quality of services to their customers. The
banks should design the web site to address security and trust issues of the customers

The survey was conducted with 74 people. So, we can`t say that this is the real trends of net
banking of whole the country.

People are not confident enough to whether to rely completely on internet banking. There is
hesitancy in their minds with regards to preference. so, they use both online and offline
banking.

Due to shortage of time, data can`t be collected from all type of people.

The study was conducted with the help of students, shopkeepers and business men etc.

The study reveals that ATM banking, bill payments, online shopping and online recharge etc
are performed by so many respondents but it does not reflect that NEFT, RTGS or DEMAT
services are not performed by the people.

4.3. RECOMMENDATIONS:

We can see the time is changing and we are now accepting technology but there is still a lot
of perceptual blocking which hampers the growth its normal tendency of technology, that
why the growth of internet banking is very primitive in future.

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❖ RECOMMENDATIONS TO BANKS:
• Banks should obey the RBI norms and provide facility as per the norms. But
these are not completely followed by banks. Some of our respondents
complained that their banks do not give feedback of online transaction in
proper times.
• Internet banking facility must be made available in all banks as well as in all
branches.
• There are some co-operative banks in this area and this type of bank still do
not have core banking facilities. For this reason, this type of bank lose their
customers. So co-operative banks should be covered under core- banking
system.
• Link failure is a very big problem especially in UCO bank and for this reason
the important business deals have been hampered. So, banks should have to
modified their software immediately.
• Now some banks update automated balance update machine to avoid customer
harassment but all banks should except this system very quickly.
• Banks should develop their services not only in town areas but also in village
areas. Banks should install more and more ATMs in both urban and rural
areas.
• There is another problem I faced at the time of conducting this survey that the
respondents complained that there are so many atm machines in their locality
but most of the ATMs have normally no cash at all.so, bank should extend this
service with regular cash filling.
• Fair dealing with customers is more preferable. The staff should be co-
operative, friendly and must be capable to understand the problem of the
customers.
• Banks should give proper training to customers to use internet banking.
• Banks should always update their security system and create a trust in the
mind of customers toward security of their accounts.
• Banks should make their sites more user friendly. Customers should be
motivated to use internet banking facility more.

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 • Banks are now using two factor authentication either password and OTP but
they should improve that and use three factor authentication because hackers
sometime break the two-factor authentication system.

❖ RECOMMENDATION TO USERS:
• Use anti-virus and maintain integrity of your computer by scanning regularity
of computer viruses.
• If using the same computer or mobile for internet banking, e-mail and web
browsing, always log off banking section before checking e-mail or web
browsing. computer virus today are capable of installing themselves through
e-mail link as well as web sites where just passively moving your mouse over
an image could be enough to install a script that grabs your cached online
banking account.
• Always use original operating system with original commercial anti- virus
which could be better than crack version or free sample.
• If you are using computer with multiple operating system, you must separately
install anti-viruses for each O.S.
• Do not respond to e-mail requesting account information, account verification
or banking access credentials such as usernames, passwords, pin codes and
similar information.
• Do not use e-mail to send sensitive information.
• Install a dedicated, actively managed network firewall to limit the potential for
unauthorized access to your network or computer.
• Consider installing a spyware detection program.
• Clear the browser cache before starting an online banking session to eliminate
copies of web pages that have been stored on the hard disk.
• Verify the secure session in the browser.
• Avoid using automatic login feature that save your personal detail.
• Create a strong password but easy to remember without writing it down
anywhere.
• Frequently change your password combination for better protection.

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 BIBLIOGRAPHY

❖ WEBSITES:

• www.google.com
• www.wikipedia.in
• www.slideshare.net
• www.yahoo.com
• www.rbi.in
• www.sbionline.com

❖ BOOKS:

An Introduction to E-Commerce: - written by Ramit Kumar Roy & Debasri Dey and
published by the Elegant Publications.

E-Commerce: - written by Prof.(Dr.) Dilip Kumar Chakraborty & Prof. Debdulal

Chatterjee and published by B.B. Kundu Grandsons.

Introduction to Information Technology & its Business Application: - written by A.K.

Mukhopadhyay & A. Das and published by Kalimata Pustakalaya.

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 ANNEXURE- 1

QUESTIONNAIRE

Dear respondent,

I am MBA student of Himachal Pradesh University School Shimla and presently

doing a project on “INTERNET BANKING AND ITS EFFECT ON INDIAN
CUSTOMERS POST COVID-19 PANDEMIC”. I request you to kindly fill the questions
stated below and I assure you that the data generated by you will be kept confidential.

ANKUSH KUMAR

MBA 4th semester

Himachal Pradesh University Business School Shimla

A. PERSONAL DETAILS: -

I. Name …………………….
II. Gender: - Male ☐ female ☐
III. Age group: - below 20 ☐, 20-35 ☐, 35 above 50
IV. Occupation: -…………………………

B. EDUCATIONAL PROFILE: -

☐Higher Secondary, ☐ Graduate, ☐ Post- graduate, ☐ Other.

QUESTION 1: HOW OFTEN DO YOU USE INTERNET PER DAY?

☐ ONE HOUR ☐ TWO HOUR ☐ THREE HOURS ☐ ABOVE THREE HOURS

QUESTION 2: IN WHICH BANK DO YOU HAVE AN ACCOUNT?

☐ SBI ☐ AXIS ☐ ICICI ☐ UCO ☐ HDFC ☐ PNB ☐ OTHER

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QUESTION 3: DO YOU AVAIL OF INTERNET BANKING FACILITY ONLINE?

☐ YES ☐ NO

QUESTION 4:HOW FREQUENTLY DO YOU USE INTERNET BANKING

SERVICES DURING COVID 19 PANDEMIC?

☐ DAILY ☐ WEEKLY ☐ MONTHLY ☐ OCCASIONALLY ☐ YEARLY

☐NEVER

QUESTION 5: WHY DO YOU AVAIL OF INTERNET BANKING?

☐ PRIVACY ☐ 24*7 BUSINESS HOURS ☐ CONVINIENCE ☐ NOT TO MOVE

ANYWHERE ☐ EASY TO USE ☐ SAVING TIMES & MONEY ☐ HARD TO SAY

QUESTION 6: DO YOU FIND INTERNET BANKING USEFUL DURING COVID-19

LOCKDOWN?

☐ YES ☐ NO ☐ NOT SURE

QUESTION 7: DO INTERNET BAKING SERVICES ASSIST YOU IN

MAINTAINING THE PRECAUTIONARY MEASURES REQUIRED TO AVOID
THE EFFECTS OF COVID-19?

☐ YES ☐ NO ☐ NOT SURE

QUESTION 8: WHAT ARE THE CHALLENGES YOU HAVE FACED WITH THE
INTERNET BANKING SERVICES DURING THE COVID 19 PHASE?

☐ APP CRASH ☐ TRANSACTION FAILURE ☐ DIFFICULTY IN REACHING

CUSTOMER SUPPORT ☐ OTHER ISSUES ☐ NO ISSUES

QUESTION 9: WHICH TYPE OF INTERNET BANKING SERVICES HAVE YOU

USED THE MOST DURING THE COVID-19 LOCKDOWN?

☐ MONEY TRANSFER ☐ BILLS PAYMENT AND RECHARGES ☐ ONLINE

PURCHASES ☐ ACCOUNT OVERVIEW ☐ OTHER SERVICES

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QUESTION 10: WHAT DO YOU THINK THAT AFTER THE COVID 19
LOCKDOWN, YOUR USE OF INTERNET BANKING SERVICES IS _______?

☐ INCREASE ☐ DECREASE ☐ DON’T KNOW

QUESTION 11: AFTER FACING THE DIFFICULT PHASES OF COVID-19

LOCKDOWN, WHAT DO YOU THINK INTERNET BANKING IS BETTER
SUBSTITUTE OF TRADITIONAL BANKING SYSTEM?

☐ YES ☐ NO ☐ CAN’T SAY

QUESTION 12 DO YOU PREFER INTERNET BANKING OVER CASH

TRANSACTIONS IF THE TRANSACTION AMOUNT IS MORE THAN RS.1000/-?

☐ YES ☐ NO ☐ CAN’T SAY

QUESTION 13: GIVE YOUR OVERALL RATING IN INTERNET BANKING

SERVICES?

☐ EXCELLENT ☐ VERY GOOD ☐ GOOD

☐ AVERAGE ☐ POOR

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