Project report

ON
A COMPARATIVE STUDY OF E-BANKING AND
TRADITIONAL BANKING SYSTEM

Submitted in partial fulfillment of requirement of

Bachelor of Commerce Honors

[Link] (H) VIth Semester (Morning)

Batch 2018-2021

Submitted to: Submitted by:

Ms. Shilpa Lalwani Astha Gupta
Assistant Professor 00514188818

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI

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 STUDENT UNDERTAKING

This is to certify that the project titled “A COMPARITIVE STUDY ON E- BANKING

AND TRADITIONAL BANKING SYSTEM” is an academic work done by Ms. Astha
Gupta submitted in the partial fulfillment of the requirement of the award of the degree
of Bachelor of Commerce Honors at Jagannath International Management School,
Kalkaji, Delhi, under my guidance and direction.

To the best of my knowledge and belief the data & information presented by her in the
project has not been submitted earlier.

SIGNATURE:

NAME OF THE FACULTY: MS. SHILPA LALWANI

DESIGNATION: ASSISTANT PROFESSOR

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 CERTIFICATE OF COMPLETION

This is to certify that Ms. Astha Gupta of [Link] (H) has completed her project on the
topic “A comparative study on E- banking and traditional banking system” of her own.

Her work is up to my satisfaction.

Ms. Shilpa Lalwani

Assistant Professor

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 ACKNOWLEDGEMENT

Any accomplishment requires the effort of many people and this work is no different.
Racing against time and fast approaching deadlines, the fact that I was able to
complete this project on time would not have been possible without the help and
support of many people. I thank all of them whose patience and support were very
instrumental.

I would also like to send my sincere thanks to my project guide Ms. Shilpa Lalwani for
her helpful hand in the completion of my project.

I would like to thank my parents who supported me all the time. They supported me
emotionally, motivated me, and encouraged me all throughout.

At last I would like to thank my friends who directly and indirectly helped me in
completing this project report.

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 CONTENTS

Description Page No.

Student Undertaking 2

Certificate of Completion 3

Acknowledgement 4

Contents with page no. 5

List of tables and figures 6

Executive Summary 7- 8

Introduction to topic 9 – 24

Objectives 25 – 26

Literature review 27 – 42

Research Methodology 43 – 48

Analysis & Interpretation 49 – 59

Findings 60 – 61

Limitations 62 – 63

Recommendations and Conclusion 64 – 67

Bibliography 68 – 70

Appendices 71 – 75

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LIST OF FIGURES:

[Link]. TITLE PAGE NUMBER

1.1 Purpose of banks 11

1.2 E- banking services 18

1.3 Types of E- banking (Drigă, 40

2012)

LIST OF TABLES:

[Link]. TITLE PAGE NUMBER

1.1 Difference between Traditional banking 33
and E-Banking

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 EXECUTIVE SUMMARY

In the era of Globalization, Banking Sector is rapidly changing since 1980s due to
technological innovation, financial liberalization with entry of new private and foreign
banks, and regulatory changes in the corporate sector.

The objectives for conducting the study were:

➢ To study the concept and difference between E-banking and Traditional

Banking – that is to understand how E- banking differs from traditional banking

➢ To analyze the online and offline services provided by banks – that is to study
what all services are provided by the banking sector in online and offline mode

➢ To understand the transition from Traditional banking to E banking – that is to

analyze how E- banking evolved from traditional banking system

➢ To study the challenges and opportunities of E Banking in India – that is to

understand the challenges being faced by the E – banking system and the

unexplored opportunities it can explore.

This project covers introduction to banking sector, basics of traditional banking and E
banking, various services provided by banks etc.

This project also covers different challenges faced by the E- banking sector and the
opportunities of E banking sector.

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Traditional Banks are the physical banks which are dedicated to the administration of
the money that their clients deposit in their custody and, on the other hand,
the bank uses that money to grant it as a loan to individuals or companies, charging
them interest

Banking has witnessed many innovations in the past decades and one of the major
one amongst them is e- banking which was result of information and technological
revolution. These IT revolutions changed the entire working of banking sector as, e-
banking gave birth to new type of financial services which was created by the
intersection of tradition retail financial services with the internet. E-banking provides
provision of performing basic banking services or transaction through web.

E-banking is a blanket term used to indicate a process through which a customer is

allowed to carry out, personal or commercial banking transactions using electronic and
telecommunication network.

Introduction of e- banking made banking very convenient and time saving. Main focus
of e- banking is to provide a customer with convenient and transparent methods of
doing online financial transactions like automatic deposits, automatic bill payments
from their bank account, getting online loan and many more.

To conclude, many people still use traditional banking as they believe in physical
interaction, but E- banking has become a big part of everyone’s life due to its
convenience and easy accessibility even though it still has a lot of scope to expand in
various opportunities and improve on its drawbacks.

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 CHAPTER-1

INTRODUCTION

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 INTRODUCTION TO THE TOPIC

Banking is one of the most flourishing and essential service industries in today’s
modern times. A strong banking sector can be termed as lifeline of an economy.
Therefore, it is not wrong to say that present and future of an economy entirely depends
upon the success and development of banking industry of that economy.

In today’s era of information and technology an economy cannot achieve the target of
sustainable development by following the traditional banking system only. So, it has
become mandatory for developing country like India to increase automation in banking
industry.

The transformation from traditional banking to electronic banking started from the use
of automatic teller machine (ATM) in the 1980’s, direct bill payment, electronic fund
transfer (EFT) and so on. The revolutionary online banking which is a component of
electronic banking has been accepted by the customers with growing awareness and
education.

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.

A bank is a financial institution that accepts deposits from the public and creates a
demand deposit while simultaneously making loans. Lending activities can be directly
performed by the bank or indirectly through capital markets. A bank can generate
revenue in a variety of different ways including interest, transaction fees and financial
advice.

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PURPOSE OF BANKS:

A bank is involved in borrowing and lending money. Banks take customer deposits in
return for paying customers an annual interest payment, then uses the majority of these
deposits to lend to other customers for a variety of loans. The difference between the
two interest rates is effectively the profit margin for banks. Banks play an important role
in the economy for offering a service for people wishing to save and in offering finance
to businesses who wish to invest and expand. These loans and business investment
are important for enabling economic growth.

Figure 1.1: Purpose of banks

Main purpose of banks:

➢ Keep money safe for customers

➢ Offer customers interest on deposits, helping to protect against money losing

value against inflation.

➢ Lending money to firms, customers and homebuyers.

➢ Offering financial advice and related financial services, such as insurance

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Need for banks:

• To Safeguard one’s cash

• To Manage finances – record keeping and budgeting

• To Receive the paycheck quickly using direct deposit

• To facilitate financial transactions

• For insuring people’s liquid assets

• For providing debit and credit card services

• For Invest money and earning interest

• For providing loans

The economic functions of banks include:

• Issue of money: In the form of banknotes and current accounts, subject

to cheque or payment at the customer's order.

• Netting and settlement of payments: Banks act as both collection and paying
agents for customers, participating in interbank clearing and settlement systems
to collect, present, be presented with, and pay payment instruments.

• Credit intermediation: Banks borrow and lend back-to-back on their own account
as middle men.

• Credit quality improvement: Banks lend money to ordinary commercial and

personal borrowers (ordinary credit quality), but are high quality borrowers. The
improvement comes from diversification of the bank's assets and capital which
provides a buffer to absorb losses without defaulting on its obligations.

• Money creation/destruction: Whenever a bank gives out a loan in a fractional-

reserve banking system, a new sum of money is created and conversely,
whenever the principal on that loan is repaid money is destroyed.

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 • Asset liability mismatch/Maturity transformation: Banks borrow more on
demand debt and short-term debt, but provide more long-term loans. In other
words, they borrow short and lend long. With a stronger credit quality than most
other borrowers, banks can do this by aggregating issues (e.g., accepting
deposits and issuing banknotes) and redemptions (e.g., withdrawals and
redemption of banknotes), maintaining reserves of cash, investing in marketable
securities that can be readily converted to cash if needed, and raising
replacement funding as needed from various sources (e.g., wholesale cash
markets and securities markets).

TRADITIONAL BANKING

Traditional banking is the physical financial institution that is dedicated to the

administration of the money that its clients deposit in custody and, on the other hand,
the bank uses that money to grant it as a loan to individuals or companies, charging
them interest. This is essentially the commercial activity to which traditional banking
has always been dedicated.

Traditional Banks are the first financial intermediaries to function as depository

institutions, maintain deposits, make loans, and directly control the checkable deposits
portion of the economy's money supply.

Traditional banking has three distinct components:

1. Capital

2. Deposits

3. Loans

Capital
The pillars of Traditional Banking (Deposits & Loans) rest upon the foundation of
Capital. All banks must have access to Capital, which is leveraged with deposits and
then prudently converted into loans that generate jobs and economic growth.

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Deposits
Once Capital is invested, it is leveraged through the collection of deposits that
represent the savings or liquid reserves of individuals and businesses in the
community.

Loans
The combination of Capital and insured Deposits constitutes the basis for the amount
of money that can be disbursed in Loans. Prudent loans to individuals and businesses
drive healthy economic growth.

Few services offered by the traditional banks:

• Payment and Remittance Services:

An important function of banks is that it enables people to transfer funds from

one account to another, from one city to another.

• Overdraft:

Overdraft services allow account holders to withdraw more than what their
deposits allow. Though, interest is charged on the overdrawn amount. This is
one of the many ways banks lend money to their customers.

• Currency Exchange:

The banks provide foreign currency exchange with local currency in an easy
manner for travel or trading purposes.

• Consultancy:

Banks have a holistic approach and they aim to provide all kinds of services to
their customers that involve their financial situation. Banks have financial and
legal experts to provide advice and solutions about customers wealth,
investment, and trading.

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 • Lockers:

Banks also offer safe deposit to their clients to store their valuables safely, at
minimal fees.

• Money Transfer:

There are several ways banks offer to transfer money from one part of the world
to the other with the help of demand drafts, money orders, cheques, online
banking, and more.

• Investment Banking:

Many banks offer financial services to their customers. They help them make the
best of their wealth by offering several investment products.

• Wealth Management:

Wealth management is one of the many investment services offered by banks.

It allows the customers to plan their finances to grow long-term wealth.

Apart from all this, banks also offer several auxiliary services to the customers such
as:

➢ solvency certificates

➢ mutual funds

➢ insurance services

➢ gold coins etc.

ADVANTAGES OF TRADITIONAL BANKING:

• Security:

In traditional Banking transactions, the transactions are secure as there is no risk

of any cyber fraud. The only component that matters is that one must have to
keep his/her bank documents and bank book safely.

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 • Physical interaction:

If a person is having any problem related to the bank, he/she can visit the bank
and solve their issues.

• Ease of understanding:

In traditional banking, one doesn’t need any special skill or any technical
knowledge to operate with their banks.

• No gadgets:

Traditional banking doesn’t require any special electronic gadget such as a

mobile, desktop etc.

DISADVANTAGES OF TRADITIONAL BANKING:

• Slow process:

A major disadvantage is the slowness of the transactions that are carried out,
usually caused by its internal hierarchy / organization or the actions of its own
officials. Another demonstration of the slowness is the time that transactions
between different banks usually take, especially on holidays or weekends.

• Operating expenses:

Operating expenses tend to be high in traditional banking, since in addition to

having administrative offices, they also have offices to serve their clients in
person (due to the idea that the more in-person offices there will have a better
reputation).

Among its main operating expenses are: paying rents from the premises where
they operate, payment of public services, security, in addition to payments of
payroll of face-to-face employees.

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 • Limited to working hours:

In the case of needing to make a transfer or other type of management, in many

cases “physical presence” must be made in the bank’s office and within the
business hours established by the bank, which is a great disadvantage, since
the banking hours generally coincide with the working hours of several
companies or businesses etc.

• The obligation to go to the Banks:

When it comes to making a transfer or any other type of financial movement, one
has to go the bank in order to make any transaction.

• Less Flexibility and Availability:

Traditional banking is restricted by timings and geographical locations. The

banks follow a fixed schedule for all transactions and all paperwork, hence it may
not always possible to get things done faster and the way one wants it to. Due
to the constraint of physical location banks may not be available when and where
one needs it to be.

ELECTRONIC BANKING

Electronic banking refers to the system of banking which is done by the use of
computers and telecommunications to enable banking transactions to be done by
telephone or computer rather than through human interaction. E- banking is a process
of banking services and products through electronic channels such as internet, cell
phones etc.

E-banking is a blanket term used to indicate a process through which a customer is

allowed to carry out, personal or commercial banking transactions using electronic and
telecommunication network.

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E-banking is a safe, fast, easy and efficient electronic service that enables peoples to
access their bank accounts and carry out online banking services, 24 hours a day, and
7 days a week. With this service people can save time by carrying out banking
transactions at any place and at any time, from their home or office, all that is required
for this purpose is internet access.

E-banking covers facilities such as – fund transfer, checking account statements, utility
bill payments, opening of bank account, locating nearest ATM, applying for loans, etc.
using a personal computer, smartphone, laptop or personal digital assistant.

SERVICES UNDER E-BANKING:

E-banking involves information technology- based banking. Under this I.T system, the
banking services are delivered by way of a Computer-Controlled System. This system
does involve direct interface with the customers.

Figure 1.2: E-banking services

• Automated Teller Machine (ATM):

ATM is one of the most common E-banking services, started in the 1980’s in India.
An ATM is a computerized Tele-communication device which provides the

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 customers the access to financial transactions in public places without human
inter-mention.

It enables the customers to perform several banking operations such as

withdrawals of cash, request of mini-statement etc.

The advantages of ATM are:

➢ ATM provides 24 hours service: ATMs provide service round the clock. The
customer can withdraw cash up to a certain a limit during any time of the day
or night.

➢ ATM gives convenience to bank's customers: ATMs provide convenience to

the customers. Now-a-days, ATMs are located at convenient places, such as
at the air ports, railway stations, etc. and not necessarily at the Bank's
premises.

➢ ATM reduces the workload of bank's staff.: ATMs reduce the work pressure on
bank's staff and avoids queues in bank premises.

➢ ATM provide service without any error: The customer can obtain exact amount.
There is no human error as far as ATMs are concerned.

➢ ATM is very beneficial for travelers: ATMs are of great help to travelers as they
need not carry large amount of cash with them.

➢ ATM provides privacy in banking transactions: Most of all, ATMs provide

privacy in banking transactions of the customer.

• Electronic Funds Transfer:

When money is transferred electronically from one bank to another, it is called

as electronic fund transfer. It covers direct debit, direct deposits, wire
transfers, NEFT, RTGS, IMPS, etc.

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• Tele-Banking

It is a delivery channel for marketing, banking services. It is increasingly used in

these days. A customer can do non-cash business related banking over the
phone anywhere and at any time.

• Mobile Banking:

The customers can utilize it with the help of a cell phone. The bank will install
particular software and provide a password to enable a customer to utilize this
service.

• Internet Banking:

This is the result of the development that has taken place in the information
technology. Internet banking means any user or customer with personal
computer and browser can get connected to his banks website and perform any
service possible through electronic delivery channel. There is no human operator
present in the remote location to respond. All the services listed in the menu of
bank website will be available.

• Credit Cards:

A credit card is a small plastic card issued to users as a system of payment. It

allows its holder to buy goods and services based on the holder's promise to pay
for these goods and services. The issuer of the card creates a revolving account
and grants a line of credit to the consumer (or the user) from which the user can
borrow money for payment to a merchant or as a cash advance to the user. Most
credit cards are issued by banks or credit unions.

• Debit Card:

A debit card (also known as a bank card or check card) is a plastic card that
provides the cardholder electronic access to his or her bank account/s at a
financial institution. Some cards have a stored value against which a payment is
made, while most relay a message to the cardholder's bank to withdraw funds
from a designated account in favour of the payee's designated bank account.

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 The card can be used as an alternative payment method to cash when making
purchases. Like credit cards, debit cards are used widely for telephone and
Internet purchases. However, unlike credit cards, the funds paid using a debit
card are transferred immediately from the bearer's bank account, instead of
having the bearer pay back the money at a later date.

• Cheques Truncation Payment system (CTPS):

Truncation is the process of stopping the flow of the physical cheque issued by
a drawer to the drawee branch. The physical instrument will be truncated at some
point enroute to the drawee branch and an electronic image of the cheque would
be sent to the drawee branch along with the relevant information like the MICR
fields, date of presentation, presenting banks etc. Thus, with the implementation
of cheque truncation, the need to move the physical instruments across
branches would not be required, except in exceptional circumstances. This
would effectively reduce the time required for payment of cheques, the
associated cost of transit and delay in processing, etc., thus speeding up the
process of collection or realization of the cheques.

ADVANTAGES OF E - BANKING
• Convenience:
In this busy and hectic schedule it is difficult for an individual to make time to visit
bank for checking their account balance, interest rates, successful transfer of
money, and any other update. E- banking enables an individual to access their
banking system anytime and anyplace. An individual doesn’t need to stand in
queues for any money deport and transfer.

• 24*7:
The virtual banking system provides convenience to transfer money 24 hours in
365 days. One doesn’t need to stick to perform any transaction within working
hours as one can do as per your convenience in 24 hours.

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• Monitoring:
The customers can access their updated passbook anytime for monitor their
transactions to manage their financial plans.

• Online bills payment:

Customers don’t need to stand in queue for paying bills as it has feature to pay
any kind of bill including electricity, water supply, telephone, and other bills.

• Quality Service:

E-banking has improved the quality of services by providing them convenience

to perform their transactions anytime during the day. The consumers are able to
apply for loan, insurance, and any other services without visiting the banks
physically which shows that the quality of e-banking is fast and effective.

• High liquidity:

People can transfer money and utilize anytime which is the greatest advantage
to access banking. People don’t need to visit banks for transferring money which
can be done from anywhere without visiting to the banks physically.

• Low-cost banking service:

E banking reduces operational costs with better quality of services. It provides

convenience with high customer service at lower rate. The Bank charges
minimal amount for operations which reflect that the e-banking services are
reasonable and efficient.

• High interest rates:

E banking provides low interest rate on mortgage loans than banks. The
operational cost is also low which helps to saving amount that is beneficial for
the customers. There are various other facilities such as no minimum balance
account which helps to maintain account with zero balance. It increases total
disposable income of the consumers without even worry about maintaining
minimum balance.
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DISADVANTAGES OF E-BANKING

E-banking has various advantages which improves the banking system but there are
disadvantages of using internet banking. These are as follows:

• Security issues:

E banking is not very secure as there are many problems related to the website
and data can be hacked by the hackers. It can lead to financial loss to the users.
The financial information can also be stolen that can also create financial loss.

• Lack of physical interaction:

E banking doesn’t require any physical interaction with banking executives or

representatives, which in turn has proved to be a disadvantage as well. The
reason being that many people feel more comfortable and confident only after
their issue has been resolved by physical interaction.

• Transaction problem:

During E banking there are various issues faced by the user such as transferred
payment is not reflected, payment failed, and other issues due to technical
support.

• Training and development:

The banks need to conduct training and development program for employees for
providing quality online services which enhance the customer experience. It
requires huge investment to train them for providing effective services.

• Requires the use of skills and gadgets:

In order to use E banking services, the customer needs to be computer literate

and have should have technical knowledge and access to certain tools such
internet, electronic device etc. Hence E banking becomes a constraint for
computer illiterate people.

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OPPORTUNITIES IN E-BANKING SECTOR

• Escalating number of Internet Users & Computer Literacy:

Success of Electronic Banking principally is related to the fact that people must
have acquaintance about internet technology, so that internet banking services
can be smoothly implemented. Therefore, increasing no. of internet users in India
can be a very grand opportunity and this must be utilized to the greatest extent
by influencing additional internet users to use online banking services.

• Rural Markets:

India’s untapped market for banking sector extends to a major part of the total
population of India, which is considered a vast scope for development of e-
Banking in India. All the urban areas have banking services but small number of
big villages has the banks. Therefore, e-banking must expand its geographical
reach in remaining all villages because large proportion of Indians still living in
rural areas.

• Competitive Advantage:

The benefit of adopting e-banking provides a competitive advantage to the banks

over other players. The Implementation of e-banking is beneficial for bank in
many ways as it reduces cost to banks, improves customer relation increases
the geographical reach of the bank, etc. The benefits of e-banking have become
opportunities for the banks to manage their banking business in a better way

• Creating a more secure user interface:

A major issue with E-banking is the security threats and hacking. Creating a more
secure interface will provide more confidence to customers and will enable more
customers to adopt the E-banking services.

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CHAPTER-2

OBJECTIVES

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 OBJECTIVES:

➢ To study the concept and difference between E-banking and Traditional

Banking

➢ To analyze the online and offline services provided by banks

➢ To understand the transition from Traditional banking to E banking

➢ To study the challenges and opportunities of E Banking in India

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 CHAPTER-3

LITERATURE REVIEW

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 LITERATURE REVIEW

As per Section 5(b) of the Banking Regulation Act 1949, “Banking” means the
accepting, for the purpose of lending or investment, of deposits of money from the
public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or
otherwise.”

According to Imola Drigă and Claudia Isac (2014) “The banking industry is being
reshaped by globalization, competition and innovation and customer needs. Due to the
emergence of a knowledge-based economy and society as information and
communication technology (ICT) advanced, banking services have undergone
profound changes during the last period.”

According to Wisdom (2012) ICT, the most important factor in the future development
of banking, enables banks to create sophisticated products, to have better market
infrastructure and to reach geographically distant and diversified markets.
Furthermore, consumers’ banking needs and demands have changed significantly
over the past three decades. They require today more personalized banking products
and services and they expect to access such services at any time and any place.

In addition, customers are looking for simplicity in their day-to-day banking and those
who trust their bank are more willing to consolidate their banking needs with a single
financial services provider.

Loonam & O’Loughlin, 2008 state “Globalization, competition, changing social trends
and especially ICT advancements have caused intense restructuring of the banking
industry. “

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A study by Dr. S. Vijay Kumar (2017) - Banking Sector in India – A Review

Today, the banking industry in our country is stronger and capable of withstanding the
pressures of competition. It withstood Global Financial Crisis (2008).

In the era of Globalization Banking Sector in India is rapidly changing since

1990s due to technological innovation, financial liberalization with entry of new
private and foreign banks, and regulatory changes in the corporate sector. Indian
banking industry is gradually moving towards adopting the best practices in
accounting, internationally accepted prudential norms, with higher disclosures and
transparency, corporate governance and risk management, interest rates have been
deregulated, while the rigor of directed lending is being progressively reduced.

In our country, currently we are having a fairly well-developed banking system with
different classes of banks – public sector banks, foreign banks, private sector banks –
both old and new generation, regional rural banks and co-operative banks with the
Reserve Bank of India as the leader of the system.

In the banking field, there has been an unprecedented growth and diversification of
banking industry and our banks are now utilizing the latest technologies like internet
and mobile devices to carry out transactions and communicate with the masses.

The history of Indian banking can be divided into three main phases.

❖ Phase I (1786- 1969) - Initial phase of banking in India

❖ Phase II (1969- 1991) - Nationalization, regularization and growth

❖ Phase III (1991 onwards) - Liberalization and its aftermath

➢ Recent Trends in the Banking System:

• Electronic Payment Services (e – Cheques)

• Real Time Gross Settlement (RTGS)

• Electronic Funds Transfer (EFT)

• Electronic Clearing Service (ECS)

• Automatic Teller Machine (ATM)

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 • Point of Sale Terminal:

• Tele - Banking

• Electronic Data Interchange (EDI)

• Net Banking

• Mobile Banking

• Amalgamation of Banks

➢ Implications:

• The banks were quickly responded to the changes in the industry; especially the
new generation banks.

• The continuance of the trend has re-defined and re-engineered the banking
operations as whole with more customization through leveraging technology.

• As technology makes banking convenient, customers can access banking

services and do banking transactions any time and from any ware.

• The importance of physical branches is going down.

• The importance of physical branches is going down.

➢ Challenges

• Non – Performing Assets (NPAs):

• Information technology (IT) in Banking:

• World Wide Banking (WWB)

• Cyber Crimes

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➢ Future Outlook:

Banking landscape is changing very fast. The Reserve Bank in its bid to move
towards the best international banking practices will further sharpen the prudential
norms and strengthen its supervisor mechanism.

There will be more transparency and disclosures. In the days to come, banks
are expected to play a very useful role in the economic development and the
emerging market will provide ample business opportunities to harness.

Although, the adoption of technology in banks continues at a rapid pace, the

concentration is perceptibly more in the metros and urban areas. The benefit of
Information Technology is yet to percolate sufficiently to the common man living in
his rural hamlet. More and more programs and software in regional languages
could be introduced to attract more and more people from the rural segments
also.

Standards based messaging systems should be increasingly deployed in order to

address cross platform transactions. The surplus manpower generated by the use
of IT should be used for marketing new schemes and banks should form a ‘brains
trust' comprising domain experts and technology specialists.

➢ Conclusion:

Indian banking system will further grow in size and complexity while acting as an
important agent of economic growth and intermingling different segments of the
financial sector.

It automatically follows that the future of Indian banking depends not only in internal
dynamics unleashed by ongoing returns but also on global trends in the financial
sectors.

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A study by Dr. Sandeep Gandhi and Ruchi Gupta (2020) - A Descriptive Study On

E-Banking Vs. Traditional Banking in India

➢ Concept of E-Banking

E-Banking indicated towards the method of utilizing services of banking online upon
the computer network. It is a method with the help of which users use all services
of banks through the online network. It is also defined as internet banking, online
banking & virtual banking (Kaur.2017).

Consumers are quickly able to run their accounts & carry out various economic
business dealing just by utilizing services which exists of distinct kinds for example
Telebanking, smart cards, cash machine, Electronic cheques & plastic money.
Consumers are adequate to protect their bank account & take care of them from
deception utilizing e-banking service. They can easily oversee their account
continuously. It also decreases the assignment& function cost of banking
organizations. E-banking has also decreased the possibility of human mistake,
there is no feasibility of mistake happen in a fully automated system (Gupta.2002).

The primary bank was the ICICI bank which offered services of internet in 1997 and
now looking towards that mostly, today’s-generation banks also providing the same
to their clients (Sharma.2010)

➢ Concept of Traditional Banking

Traditional banking means that the users have to go the bank for the primary
banking requirement such as withdrawal or deposit of cash, funds transfer, verifying
statement of accounts etc. (Golden.2016).

It has been called as the original banks which was the method of past in the
economy. They were the original commercial mediator to provide bank accounts.
From the exterior they had the big buildings with pillars made by marbles but interior
it had abundance of money in box. This has been entitled as “Bank”. They were big
athlete of the commercial markets. They converted the savings of house into loans
for business as per an investment. Traditional Banking designed on IT acceptance.

32
 The Indian Banking Sector arises up to the world of technology in beginning of
1990’s. In India public sector bank has been influenced the banking sector, who
occupied above 80% base of total asset (Chanda. 2012).

BASIS TRADITIONAL BANKING ELECTRONIC BANKING

Real Lending institutions remain real for E-Banking do not bear real
existence granting aids to the users. existence as services are offered
online
It absorbs a maximum time period It does not absorb time period of
Period
of consumers of visiting banks consumers because they do not
personally. have to visit banks personally
Full time Public have to inspect banks only at E-Banking is accessible at any time
services the time of the working hours. and it grants 24 hours access.

Traditional banking does not Protection is one of the problems

Protection from encounter protection of danger. dealt by customers in running
danger accounts done with computer
network.
High Priced Users have to payout money for It is almost cost effective as
consumers do not have to payout
visiting banks.
money for visiting banks.

Price Real existence indicates a lot of Such price is flung as the banks do
operating and fixed cost. not have real existence.
Customer In traditional banks, the bankers In online banking, the users do not
Service
and clerical staff of the bank can have to stand in a line to accomplish
attend only few users at a time. fixed bank transactions.

Table 1.1: Difference between Traditional banking and E-Banking

33
➢ Characteristics of E-Banking (Prerna.2011)

• Speedy business dealing

• Reduced cost of business dealings

• Granting 24×7 Service

• Establish faith among Consumers

• Removes Geographical obstruction

➢ Various E-Banking products in India

• ATM

• NEFT

• Debit Cards

• Mobile banking

• Tele Banking

• Smart Card

➢ ADVANTAGE OF E-BANKING (Vaghela.2013)

❖ To the customers:

• Users can utilize their computers and telephone modem to dial frame house or
any seat where they have approach to computer.

• The aid is accessible seven days a week, 24 hours a day

• Transactions are accomplished & confirmed rapidly. Even though not

instantaneously dispose of time which is comparable to that of a transaction
from ATM.

• In general, the users will find lesser fees & greater interest rates for deposits
because of the decreased cost of functioning online & not require abundant
physical bank branches.

34
 • And the range of transaction available is fairly broad. Consumers can do
everything from easily verifying on balance of an account to spreading from
intervention.

❖ To the Banks:

• E-Banking granting competing benefits to the Banks.

• E-Banking serve restricted less system to the bank and is not obligated to the
number of branches. Each PC connected to modem and telephone acquiring
internet connection can deliver banking facility to the clients. An ATM on the
path-side can grant withdrawal of currency as per requirement of the
consumers.

• In case of ATM, Credit and debit cards, POS terminals online endanger of
excess with drawl can be thrown out.

• Burden on branches can be significantly decreased by building centralized data

base and by taking over some of the accounting operations.

➢ DISADVANTAGE OF E-BANKING (Chavan .2013)

• Technology and Service Interruptions

• Security

• Restricted Scope of Services

• Promising to up expend

➢ Challenges faced by E-banking (Mitham.2017)

• Habits of Traditional Banking

• Safety

• Difficulty in Transaction

• Technological problems

• Low Budgets

35
➢ Conclusion:
Traditional banks did not grant enough facilities to their consumer as compare to
obtained from online bank organization’s that is why due to lack of time, people are
very much convinced of the services of E-banking. For quick, e-banking consumers
are achieving distinct advantage like as; Cash machine, e-banking, credit card and
a distance of choice of purchasing or auction. As per result, maximum number of
the users is transferring to e-banking system. Utility, anticipated ease of utilization;
awareness of consumers towards E-banking and anticipated risk are the essential
components of E-Banking acceptance. This study concludes that a most of the
customers are adopting E-Banking because of many positive benefits. Banking will
grant new opening of services into the active system in the future for developing
system of traditional banking.

A study by Monisha, Kanika Bhudhiraja, Jatinder Kaur (2017) - Electronic Banking in

India: Innovations, Challenges and Opportunities

In India innovation in baking sector was began since 1991 with introduction of
liberalization and globalization processes as result of it, E- Banking came into progress.
This Information Technology revamps the entire banking sector.

E- banking drastically and rapidly altered the way of client banking, banks started
providing different services related to cash deposits, cash withdrawals that to through
electronic means. Due to this I.T revolution the number of electronic transactions is
increasing day by day and world has emerged as a cyber world where each and every
one is connected through internet.

E- Banking made the mobility of foreign funds and investment possible which turned
world into global market and this market is growing so fast that it has almost abolished
the effect of national boundaries. It is not wrong to say that this I.T innovation in baking
sector in form of E-banking has introduced new business paradigm in country like in
India.

36
In past three decades the operational efficiency of Indian banks has increased to
several folds, now the time taken by the banks in performing different transaction has
been reduced, with this advancement competition among banks has also increased.

Every bank is trying to use as much latest technological innovations in order to facilitate
its customers.

One of the key features in this regard is innovation banking or e- banking, which a lot
of banks are currently providing in India. Internet Banking or E- Banking refers to a
system that allowing individual customers to perform various banking activities from
different sites like their home, office and other locations via internet based secured
networks.

Through Internet or online banking traditional banks are enable customers to perform
all routine transactions, such as account transfers, balance inquiries, bill payments and
stop-payment requests, and some even offer online loan and credit card applications.
Internet banking is a web-based service that enables the banks authorized customers
to access their account information. It permits the customers to log on to the banks
website with the help of banks issued identification and personal identification number
(PIN). The banking system verifies the user and provides access to the requested
services, the range of products and service offered by each bank on the internet differs
widely in their content.

The popular services provided by E-banking are ATMs, telebanking, internet banking,
mobile banking, anywhere and anytime banking etc. Technology adoption in banks has
shifted banking more of a capital intensive, fixed cost industry from a labour intensive,
variable cost industry. The concept of e-banking is till date evolving, it still involves lot
of innovation that are taking place every day. There are many opportunity and
challenges which are available in e- banking in Indian banking systems.

➢ Following is the list various innovation that took place in E-Banking

• Automated Teller Machines (ATM)

• Tele Banking

• Smart Card
37
 • Debit Card

• E-Cheque

• Direct Deposit

• Electronic Bill Payment

• Electronic Check Conversion

• Cash Value Stored

• Challenges in Internet Banking

• Security Risk

• Confidentiality risk

• The Trust Issue

• Customer Understanding

• Less Internet diffusion in India

• Poor Infrastructure

• Operating Conditions

• Technological Illiteracy

• Training the Employees

• Customer Education.

• Restricted Business

• Cost of Technology

• Opportunities Related to E- Banking

• Escalating no. of Internet Users & Computer Literacy

• Untouched Rural Markets

• Hard work or Initiatives taken by government agencies for financial literacy

• Competitive Gain to Banks

38
 • Opportunities for Customers

• Conclusion

With the passage of time, Concept of E-Banking has got consideration in Indian
context. E-Banking services have been effectively implemented by many public and
private sector banks as it is profitable for Consumers as well as banks.

The Role of information and technologies has been exceptional in endorsement of

e-banking. Many financial innovations like ATMs, credit cards, RTGS, debit cards,
mobile banking etc. have completely changed the face of Indian banking. But still
there is a need to have more innovative solutions as even now also e-banking is
facing many challenges like Risks regarding security, privacy, trust factor, lack of
knowledge among consumers in relation to e-banking, unsupportive infrastructure,
Low level of computer literacy among existing staff, etc are acting as obstruction in
the implementation of e-banking facilities.

A Study by Imola Drigă, Claudia Isac (2014)-E-Banking Services–Features,

Challenges and Benefits

Today traditional banking services, based on lending and deposit taking operations,
are only part of banking activities. Due to the emergence of a knowledge-based
economy and society as information and communication technology advanced,
banking services have undergone profound changes during the past decades. In order
to improve the quality of customer service delivery and reduce transaction cost, banks
have invested to a great extent in ICT and have adopted ICT networks for delivering a
wide range of banking products and services. Banks all over the world have embraced
innovative banking technologies and E- banking services in recent years. In this
context, the paper aims to provide an overview of the electronic banking service
highlighting various aspects of e-banking. Although e-banking offers many advantages
both to corporate and individual clients, electronic banking is not without certain
challenges and issues in terms of security and interest of customers.

39
In recent years the very nature of banking is changing. What used to happen only in
branches can now happen anywhere in the world at any time and through any delivery
channel a customer might choose (ATMs, telephones, personal computers).

Thus, traditional banking network consisting of physical branch infrastructure is more

and more threatened by information technologies represented by automated forms of
interaction with the client (ATMs, call centres, online banking, mobile banking) that
involve relatively lower costs and allow customers to choose from alternate delivery
channels (Darlington, 1999). Therefore, the introduction of new technologies has led
to significant changes in bank strategies and branch banking started to lose ground to
virtual banking as the use of remote banking services increased.

Globalization, competition, changing social trends and especially ICT advancements

have caused intense restructuring of the banking industry (Loonam & O’Loughlin,
2008). Initially, information infrastructure was regarded by developed banks over the
world as a mere possibility of creating new electronic distribution channels for existing
products. For this reason, remote banking services have been called electronic or e-
banking services (Nedelescu & Stănescu, 2012).

• Electronic banking involves many different types of services (Drigă, 2012):

Figure 1.3: Types of E-banking (Drigă, 2012)

• Home banking - generally refers to the practice of conducting banking

transactions from home rather than at branch locations that allows customers

40
 to obtain information about personal accounts via a phone call; it is based on
the existence of a telephone line, a customer passwords and personal code that
provide access to data; clients are able to consult account balances, transfer
money within their accounts and conduct routine transactions.

• PC banking - a form of banking that enables customers to perform bank

transactions from a PC by providing a proprietary financial software program
that E-Banking Services - Features, Challenges and Benefits 53 allows the
customer to perform financial transactions from his/her home computer via a
modem.

• Internet banking – also referred as online banking, web banking or virtual

banking, an outgrowth of PC banking, is a more developed service, a system
that enables bank customers to access accounts and general information on
bank products and services or perform account transactions directly with the
bank through a personal computer using the internet as the delivery channel;
customers are able to access all of their accounts through the website of the
bank and are allowed to conduct banking activities such as transferring funds,
paying bills, viewing account balances, paying mortgages or purchasing
financial instruments and certificates of deposits

• Mobile banking - is a system that allows bank customers to conduct different

financial transactions through a mobile device, being the newest service in
electronic banking; mobile banking relies on WAP (Wireless Application
Protocol) technologies since a mobile device requires a WAP browser installed
in order to allow access to information.

E-banking may allow banks to offer new products and services, to expand their markets
for traditional activities and to consolidate their competitive position in offering available
payment services, while ensuring operating costs cut for banks (BCBS, 1998).

The improvement of online banking and its increased use by consumers worldwide has
made this service a privileged target for cyber criminals although banks have set up

41
security systems to ensure that transactions conducted online are protected from
internet security threats. In fact, electronic banking involves several particular
operational risks: one mainly related to the security of systems and transactions,
including data confidentiality and authentication of the parties involved, and another
concerning the continuous availability of the Internet for financial transactions leading
to significant hazards, such as hackers and computer viruses (Sokolov, 2007).

Cybercrime, also known as computer crime or electronic crime, is an economic crime

committed using computers and the internet. Typical examples of cybercrime are
distributing viruses, illegally downloading files, phishing and pharming and stealing
personal information such as bank account details (PCW, 2014a).

• Conclusion

Customer satisfaction and customer service delivery are key element for banks to
ascertain customer acquisition, retention and increase bank profitability. New
technologies enabled banks to serve and assist customers not only in branches,
but anywhere in the world at any time and through any delivery channel a customer
cares to select.

With the convenience of digital channels, customers are visiting branches less often
and they use online and mobile technology for their banking needs more often.
Online and mobile banking are growing fast while branch importance declines
rapidly.

Nevertheless, branch banking is still preferred by customers when it comes to

getting banking advice. Although the internet and mobile does not completely
replace other channels, they have become lately the dominant means for
consumers to interact with their banks. Thus, there is no doubt that in the near
future electronic banking will undeniably overcome traditional banking

42
 CHAPTER- 4

RESEARCH METHODOLOGY

43
 RESEARCH METHODOLOGY

RESEARCH DESIGN
A research design is the set of methods and procedures used in collecting and
analyzing measures of the variables specified in the research problem. The design of
a study defines the study type (descriptive, correlation, experimental, review,
exploratory) and sub-type (e.g., descriptive-case study), research problem,
hypotheses, independent and dependent variables, experimental design, and, if
applicable, data collection methods and a statistical analysis plan. A research design
is a framework that has been created to find answers to research questions.

TYPES OF DESIGN
There are many ways to classify research designs, but sometimes the distinction is
artificial and other times different designs are combined. A research design is an
arrangement of conditions or collections.

Some types are:

• Descriptive (e.g., case-study, survey)

• Correlational (e.g., case-study, observational study)
• Experimental (experiment with random assignment)
• Review (literature review, systematic review)
• Exploratory (questionnaire, discussions)

In this study 2 research designs have been used that is, Exploratory research design
and Descriptive research design.

Descriptive research design

This is a theory-based design, where the researcher is primarily interested in

describing the topic that is the subject of the research. It is applied to case studies,
naturalistic observations, surveys, and so on.

This method includes data collection, analysis, and presentation. It lets the researcher
clearly present the problem statement in order to allow others to better understand the

44
need for this kind of research. Without a clear problem statement, you’re not doing
descriptive but exploratory research.

Explanatory research design

Explanatory research design is used to further expand, explore, and explain the
researcher’s ideas and theories. This type of research design is used to elaborate on
the unexplored aspects of a particular topic and try to explain the missing pieces.

SAMPLE SIZE
Sample size determination is the act of choosing the number of observations or
replicates to include in a statistical sample. The sample size is an important feature of
any study in which the goal is to make inferences about a population from a sample.

In practice, the sample size used in a study is determined based on the expense of
data collection, and the need to have sufficient statistical power. In complicated studies
there may be several different sample sizes involved in the study: for example, in a
census, data are collected on the entire population, hence the sample size is equal to
the population size.

In experimental design, where a study may be divided into different treatment groups,
this may be different sample sizes for each group.

Sample sizes may be chosen in several different ways:

• Experience – A choice of small sample sizes, though sometimes necessary, can
result in wide confidence intervals or risks of errors in statistical hypothesis testing.

• Using a target variance for an estimate to be derived from the sample eventually
obtained, i.e. if a high precision is required (narrow confidence interval) this
translates to a low target variance of the estimator.

• Using a target for the power of a statistical test to be applied once the sample is
collected.

• Using a confidence level, i.e. the larger the required confidence level, the larger
the sample size (given a constant precision requirement)

45
DATA COLLECTION

Data collection is a process of collecting information from all the relevant sources to
find answers to the research problem, test the hypothesis and evaluate the outcomes.
Data collection methods can be divided into two categories: primary methods of data
collection and secondary methods of data collection.

Primary data collection methods

They can be divided into two groups: quantitative and qualitative.

• Quantitative data collection methods are based in mathematical calculations in

various formats. Methods of quantitative data collection and analysis include
questionnaires with closed-ended questions, methods of correlation and
regression, mean, mode and median and others.

• Qualitative research methods, on the contrary, do not involve numbers or

mathematical calculations. Qualitative research is closely associated with words,
sounds, feeling, emotions, colors and other elements that are non-quantifiable.

Secondary Data Collection Methods

Secondary data is a type of data that has already been published in books,
newspapers, magazines, journals, online portals etc. There is an abundance of data
available in these sources about your research area in business studies, almost
regardless of the nature of the research area. Therefore, application of appropriate set
of criteria to select secondary data to be used in the study plays an important role in
terms of increasing the levels of research validity and reliability.

DATA COLLECTION TOOLS

• Case Studies
A case study is usually an in-depth description of a process, experience, or
structure at a single institution. In order to answer a combination of „what‟ and „why‟
questions, case studies generally involve a mix of quantitative (i.e., surveys, usage
statistics, etc.) and qualitative (i.e., interviews, focus group etc.) data collection
techniques.
46
• Interviews
In-Depth Interviews include both individual interviews (e.g., one-on-one) as well as
“group” interviews (including focus groups). The data can be recorded in a wide
variety of ways including, audio recording, video recording or written notes.

• Observation
Sometimes, the best way to collect data through observation. This can be done
directly or indirectly with the subject knowing or unaware that you are observing
them.

• Surveys or Questionnaires
Surveys or questionnaires are instruments used for collecting data in survey
research. They usually include a set of standardized questions that explore a
specific topic and collect information about demographics, opinions, attitudes, or
behaviors.

RESEARCH TOOL USED FOR THE STUDY:

For my study I opted for the method of Digital Questionnaire amongst all the Primary
Sources.
Sample size: 40

QUESTIONNAIRE

Questionnaires can be paper based, or electronic.

• Structured questionnaires are based predominantly on closed questions which

produce data that can be analyzed quantitatively for patterns and trends. The
agenda is entirely predetermined by the evaluator and provide little flexibility for
respondents to qualify their answers.

• Unstructured questionnaires, whilst still having a structured sequence and focus

predetermined by the evaluator, are based on open questions allowing respondents
the freedom to answer in their own words and therefore to provide greater
qualification in their response.

• Semi structured questionnaires take a mixed approach.

47
Why use Questionnaire?
• To allow for feedback from large number of respondents, where it is impractical
to collect feedback using other more resource intensive methods.

• To allow each respondent the opportunity to provide anonymous feedback on

their experience.

Advantages of Questionnaire:

• Economical

• Wide Coverage

• Rapidity

• An Easier Method

• It Puts Less Pressure on the Respondents

• Uniformity

• Useful Preliminary Tool

• Anonymity

• Most Flexible Tool for Data Collection

Disadvantages of Questionnaire:

• Limited Response

• Lack of Personal Contact

• Incomplete Entries

• Possibility of Manipulated Entries

• Misinterpretation by Respondent

48
 CHAPTER- 5
ANALYSIS AND INTERPRETATION

49
 DATA INTERPRETATION
SAMPLE SIZE - 40

• Age

a) Below 20 - 17.5% (7)

b) 20 to 25 - 40% (16)
c) 26 to 30 – 12.5% (5)
d) 31 to 35 – 10% (4)
e) Above 35 - 20% (8)

Interpretation:

For the purpose of this research the Age has been categorized into groups for
convenience and ease of understanding.

From the above data it can be interpreted that more respondents, that is, 40%
(16 respondents) were from the age group of 20 years to 25 years followed by
20% (8 respondents) from the age group of above 35 years old.

50
• Gender

a) Female – 52.5% (21)

b) Male – 47.5% (19)
c) Other - 0

Interpretation:

From the above data it can be interpreted that the number of female
respondents that is, 52.5% (21 respondents) is slightly higher as compared to
male respondents that is, 47.5% (19 respondents).

• Do you use traditional banking facilities?

a) Yes – 72.5% (29)

b) No – 27.5% (11)

Interpretation:

From the above data it can be interpreted that most respondents, that is, 72.5%
(29 respondents) use traditional banking facilities.

51
• According to you which is the biggest advantage of Traditional
Banking?

a) Physical location and communication – 32.5% (13)

b) Cash Deposits – 7.5% (3)
c) No technical knowledge required – 30% (12)
d) No tools or gadgets required – 2.5% (1)
e) Secure – 27.5% (11)
f) Other – 0

Interpretation:

Traditional banking has various advantages which vary for different people
based on their understanding and convenience.

From the above data it can be interpreted that more respondents, that is, 32.5%
(13 respondents) believe that the biggest advantage of traditional banks is its
physical location and communication followed by 30% (12 respondents) who
believe that the biggest advantage is that no technical knowledge is required in
traditional banking.

52
• In your opinion which is the biggest disadvantage of traditional banking
system?

a) Time bound (limited to bank hours) – 25% (10)

b) Slower service – 27.5% (11)
c) Less flexibility and availability – 12.5% (5)
d) Time consuming – 25% (10)
e) Obligation to visit banks – 10% (4)
f) Other - 0

Interpretation:

Traditional banking has various disadvantages which vary for different people
based on their understanding and level of satisfaction.

From the above data it can be interpreted that more respondents, that is, 27.5%
(11 respondents) believe that the biggest disadvantage of traditional banks is its
slower service followed by 2 set of respondents covering 25% (10 respondents)
each out of which one set of respondents believe that the biggest disadvantage
is that traditional banking is time consuming and the other set of respondents
believe that traditional banking is time bound, which means its limited to the bank
hours.

53
• Are you aware about the concept of E-banking?

a) Yes –100% (40)

b) No – 0

Interpretation:

From the above data it can be interpreted that all the respondents, that is, 100%
(40 respondents) are aware about the concept of E-banking.

• Do you indulge in any E-banking services (Like ATM, plastic cards,

online banking etc.)?

a) Yes –97.5% (39)

b) No – 2.5% (1)

Interpretation:

From the above data it can be interpreted that majority of the respondents, that
is 97.5% (39 respondents) indulge in E- banking services.

54
• What is the biggest advantage of using E-banking system for you?

a) Convenience – 25% (10)

b) Faster transactions – 20% (8)
c) 24*7 availability (in case of online banking) – 55% (22)
d) Easy accessibility - 0
e) Less operational cost - 0
f) Other – 0

Interpretation:

E- banking has various advantages which differ for different people based on
their utility and understanding.

From the above data it can be interpreted that majority of the respondents, that
is 55% (22 respondents) have the opinion that the biggest advantage of
E- banking system is that it has 24*7 availability especially in case of online
banking followed by 25% (10 respondents) who have the opinion that the biggest
advantage of E- banking is that, it is convenient.

55
• Which disadvantage of E- banking is most prominent in your opinion?

a) Security threats – 65% (26)

b) Lack of physical communication – 5% (2)
c) Special knowledge and skills – 5% (2)
d) Specific tools required - 0
e) Technical issues – 25% (10)
f) Other - 0

Interpretation:

E- banking has various disadvantages which differ for different people based on
their needs and satisfaction level.

From the above data it can be interpreted that majority of the respondents, that
is 65% (26 respondents) have the opinion that the biggest disadvantage of
E- banking system is the security threats it holds followed by 25% (10
respondents) who have the opinion that the biggest disadvantage of E- banking
is the technical issues they have to face while using the services.

56
• For which type of transactions do you use E-banking services the most?

a) Buying goods and services – 42.5% (17)

b) Paying Bills and recharging – 37.5% (15)
c) Transferring money – 15% (6)
d) Keeping check on bank balances – 5% (2)
e) Opening new accounts - 0
f) Other - 0

Interpretation:

E- banking is used for several different activities based on customer need and
their level of ease of using.

From the above data it can be interpreted that more respondents, that is 42.5%
(17 respondents) use E- banking services for the purpose of buying goods and
services followed by 37.5% (15 respondents), who use E- banking services for
the purpose of paying their bills and recharging their various tools and gadgets.

57
• According to you out of the following opportunities of E banking, which
will create maximum benefit for them?

a) Providing increased technological literacy in rural areas – 25% (10)

b) Providing a more secure user interface – 37.5% (15)
c) Promoting financial literacy – 27.5% (11)
d) Introducing and enhancing video banking – 7.5% (3)
e) Creating computer literacy programs - 0
f) Other – 2.5% (1)

Interpretation:

E- banking sector has various opportunities it has not yet explored which can
make it more popular and profitable.

From the above data it can be interpreted that more respondents, that is 37.5%
(15 respondents) believe that the opportunity that will provide maximum benefit
to the E- banking sector by providing a more secure user interface which will
help reduce the security threats, followed by 27.5% (11 respondents) who
believe that, the greatest opportunity which can provide maximum benefit is by
promoting financial literacy among people.

58
• In your opinion is E-banking system easier and more convenient that
Traditional banking system?

a) Yes – 97.5% (39)

b) No – 2.5% (1)

Interpretation:

From the above data it can be interpreted that majority of the respondents, that
is 97.5% (39 respondents) find E- banking system easier and more convenient
as compared to traditional banking system.

• Which mode of banking if preferred by you more?

a) E- Banking – 97.5% (39)

b) Traditional Banking – 2.5% (1)

Interpretation:

From the above data it can be interpreted that majority of the respondents, that
is 97.5% (39 respondents) prefer E- banking system to traditional banking.

59
CHAPTER - 6
FINDINGS

60
 FINDINGS

➢ People these days still indulge in traditional banking services for various reasons,
the most prominent being the physical location and physical communication facility
that the traditional banking system holds.

➢ E- banking is gaining much more popularity due to its convenience, faster service
and 24*7 availability in some services provided by E -banking.

➢ In today’s modern times, people from every age group are aware about the concept
of E- banking and almost everyone uses it as well.

➢ E- banking is still a newer concept and has many unexplored opportunities such as
creating a more secure user interface, providing technology literacy in rural areas,
promoting financial literacy etc., which if explored can provide many benefits.

61
CHAPTER-7

LIMITATIONS

62
 LIMITATIONS

➢ Traditional banking is limited to its physical location and is time bound, hence
it’s a slower service.

➢ E- banking is a relatively newer system and has still not explored all
opportunities. Computer and technology literacy still lacks in most rural areas.

➢ As the primary research tool used was a digital questionnaire, the response rate
was lower and people with no or poor internet connection were not able to give
their responses.

➢ Due to being a digital questionnaire, some people might have misunderstood

the questions as there was lack of physical communication.

63
 CHAPTER-8

RECOMMENDATIONS AND CONCLUSION

64
 RECOMMENDATIONS

➢ All traditional banks should encourage E- banking as well and educate people about
the ease and different services provided in E- banking.

➢ The system of E- banking can be made more secure and user friendly.

➢ There are many opportunities unexplored in E- banking upon which the system
should work in order to create more benefits for themselves as well as the society.

65
 CONCLUSION

• Today, the banking industry in our country is stronger and capable of withstanding
the pressures of competition.

• Banks today operate in a highly globalized, liberalized, privatized and a

competitive environment. In order to survive in this environment, banks have to
use IT. Indian banking industry has witnessed a tremendous development due to
sweeping changes that are taking place in the information technology. Electronic
banking has emerged from such an innovative development. The transformation
from traditional banking to electronic banking started from the use of automatic
teller machine (ATM) in the 1980’s,

• Competition and the constant changes in technology and lifestyles have changed
the face of banking. Nowadays, banks are seeking alternative ways to provide and
differentiate amongst their varied services.

Customers, both corporate as well as retail, are no longer willing to queue in

banks, or wait on the phone, for the most basic of services. They demand and
expect to be able to transact their financial dealings where and when they wish to.
With the number of computers increasing every year, the electronic delivery of
banking services is becoming the ideal way for banks to meet their clients’
expectations.

• Traditional banking is the physical financial institution that is dedicated to the

administration of the money that its clients deposit in custody and, on the other
hand, the bank uses that money to grant it as a loan to individuals or companies,
charging them interest.

Traditional Banks are the first financial intermediaries to function as depository

institutions, maintain deposits, make loans, and directly control the checkable
deposits portion of the economy's money supply.

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• E-banking is the term that signifies and encompasses the entire sphere of
technology initiatives that have taken place in the banking industry. E-banking is
a generic term making use of electronic channels through telephone, mobile
phones, internet etc. for delivery of banking services and products. E banking has
broken the barriers of branch banking.

E-banking has spread rapidly all over the globe. All Banks are making greater use
of E-banking facilities to provide better service and to excel in competition. The
spread of E-banking has also greatly benefited the ordinary customer in general
and corporate world in particular.

• Many financial innovations like ATMs, credit cards, RTGS, debit cards, mobile
banking etc. have completely changed the face of Indian banking. But still there is
a need to have more innovative solutions as even now also e-banking is facing
many challenges like i.e., Risks regarding security, privacy, trust factor, lack of
knowledge among consumers in relation to e-banking, unsupportive
infrastructure, Low level of computer literacy among existing staff, etc are acting
as obstruction in the implementation of e-banking facilities.

• E banking system is flourishing but still has many unexplored opportunities, key
opportunities can be stated in terms of untapped rural markets, competitive
advantage held to Banks, increasing internet users, efforts initiated by government
of India, etc.

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 CHAPTER-9

BIBLIOGRAPHY

68
 BIBLOGRAPHY AND REFERENCE

• [Link]
banking-and-why-is-it-important?module_item_id=26004136

• [Link]

• [Link]
banking-compared-to-cryptocurrencies/

• [Link]

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• [Link]
dia_-_A_Review

• [Link]
opportunities

• [Link]

• [Link]
[Link]#axzz4nC6KPQkL

• [Link]
internet-banking-2
• [Link]

69
Journals and Papers:

• Dr. Sandeep Gandhi11, Ruchi Gupta2 A Descriptive Study On E-Banking Vs.

Traditional Banking in India– Palarch’s Journal of Archaeology of
Egypt/Egyptology 17(7) (2020). ISSN 1567-214X

• Vijay Kumar Sarabu Banking Sector in India - A Review February 2017

Conference: Banking & Insurance Sector in India Volume: Seminar Volume

• Monisha, Kanika Bhudhiraja, Jatinder Kaur - Electronic Banking in India:

Innovations, Challenges and Opportunities - NCIETM – 2017 (Volume 5 – Issue
11)

• Gupta, P., Mishra, C. M. (2012). E-banking- New emerging trends in Indian

banking industry. Research Journal of Economics and Business Studies, 1(10),
1-3.

• Singh, K. (2012). E-banking in India: Progress and Prospects. Lambert

Academic Publishing

• Haq, S., Khan, M. (2013). E-banking challenges and opportunities in the Indian
banking sector. Innovative Journal of Business and Management, 2(4), 56-59

• Chavan, J. (2013). Internet banking- Benefits and challenges in an emerging

economy. International Journal of Research in Business Management, 1(1), 19-
26

• Anitha, K. “A Study on Challenges and Opportunities in E-Banking Sector in

India.” Shanlax International Journal of Commerce, vol. 7, no. S3, 2019, pp. 14–
17

Books:
• E-Banking in India: Challenges and Opportunities-R K Uppal and Rimpl Jatana

• E-Banking and Development of Banks- S.B. Gupta, S.K. Gupta and M.K.
Sharma

• Indian Banking – S. Natarajan, R. Parmeshwaram

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CHAPTER-10

APPENDICES

71
 APPENDICES
Sample size - 40

1. Name

2. Age

a) Below 20

b) 20 to 25

c) 26 to 30

d) 31 to 35

e) Above 35

3. Gender

a) Female

b) Male

c) Other

4. Do you use traditional banking facilities?

a) Yes

b) No

5. According to you which is the biggest advantage of Traditional Banking?

a) Physical location and communication

b) Cash Deposits

c) No technical knowledge required

d) No tools or gadgets required

e) Secure

f) Other

72
6. In your opinion which is the biggest disadvantage of traditional banking system?

a) Time bound (limited to bank hours)

b) Slower service

c) Less flexibility and availability

d) Time consuming

e) Obligation to visit banks

f) Other

7. Are you aware about the concept of E-banking?

a) Yes

b) No

8. Do you indulge in any E-banking services (Like ATM, plastic cards, online banking
etc)?

a) Yes

b) No

9. What is the biggest advantage of using E-banking system for you?

a) Convenience

b) Faster transactions

c) 24*7 availability (in case of online banking)

d) Easy accessibility

e) Less operational cost

f) Other

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10. Which disadvantage of E- banking is most prominent in your opinion?

a) Security threats

b) Lack of physical communication

c) Special knowledge and skills

d) Specific tools required

e) Technical issues

f) Other

11. For which type of transactions do you use E-banking services the most?

a) Buying goods and services

b) Paying Bills and recharging

c) Transferring money

d) Keeping check on bank balances

e) Opening new accounts

f) Other

12. According to you out of the following opportunities of E banking, which will create
maximum benefit for them?

a) Providing increased technological literacy in rural areas

b) Providing a more secure user interface

c) Promoting financial literacy

d) Introducing and enhancing video banking

e) Creating computer literacy programs

f) Other

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13. In your opinion is E-banking system easier and more convenient that Traditional
banking system?

a) Yes

b) No

14. Which mode of banking if preferred by you more?

a) E - Banking system

b) Traditional Banking system

75