TO STUDY IMPACT OF INTERNET BANKING SERVICES IN BUSINESS GROWTH OF

BANK OF BARODA
WITH SPECIAL REFERENCE TO UPPER BAZAR, RANCHI

A PROJECT REPORT

Submitted to the FACULTY OF MANAGEMENT STUDIES

In partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

NOVEMBER, 2017

Submitted by:
Sweta (MBA/10084/16)
Harshita priya (MBA/100/16)
Rinky gautam (MBA/100/16)
DECLARATION
Bank of Baroda

India's International Bank, with a network of more than 3200 branches in India
enjoys the unique distinction of overseas presence in 26 countries. The global
business of the Bank is over Rs. 4, 60,000 crores.
The Bank's Mission is 'To be a top ranking National Bank of International
Standards committed to augmenting stakeholder value through concern, care and
competence'.
The Bank believes that its people, process and technology are the key drivers for
delivering customer service. The Bank firmly believes that its Human Resources
are the most valuable asset and the HR Mission of the Bank is 'Creating
Competence and Passion for Business Excellence'.
INTRODUCTION TO SUBJECT

Internet banking is a kind of systems that enable financial institution customers, individuals
or businesses, to access accounts, transact business, or obtain information on financial
products and services through the Internet.

The Government of India enacted the IT Act, 2000 (Information Technology Act).

This act came into effect from the 17th of October 2000.

The purpose of this act, in context of banking, was to provide legal recognition to
electronic transactions and other means of Electronic Commerce.

The working group set by Reserve bank of India, has been working as a watchdog on the
different aspect of the Internet banking.

INTRODUCTION OF E-BANKING

The world is changing at a staggering rate and technology is considered to be the key driver for
these changes around us. the Indian customer is moving towards the internet banking.

The ATM and the Net transactions are becoming popular. But the customer is clear on one thing
that
He wants net-banking to be simple and the banking sector is matching its steps to the
march of technology.
E-banking or Online banking is a generic term for the delivery of banking services and
products through the electronic channels such as the telephone, the internet, the cell
phone etc.

WHAT IS E-BANKING?

Electronic banking is one of the truly widespread avatars of E-commerce the world over. Various
authors define E-Banking the meaning and features of E-Banking are as follows:
 Banking is a combination of two, Electronic technology and Banking.

Electronic Banking is a process by which a customer performs banking Transactions

electronically without visiting a brick-and-mortar institutions.

NEED FOR E-BANKING

Providing Internet banking is increasingly becoming a "need to have" than a "nice to

have" service.
The net banking, thus, now is more of a norm rather than an exception in many developed
countries due to the fact that it is the cheapest way of providing banking services.

More and more people are using electronic banking products and services because large
section of the banks future customer base will be made up of computer literate customer,
the banks must be able to offer these customer products and services that allow them to
do their banking by electronic means.

If they fail to do this will, simply, not survive. New products and services are emerging
that are set to change the way we look at money and the monetary system.

USAGE OF E-BANKING

The rise in the e-commerce and the use of Internet in its facilitation along with the enhanced
online security of transactions and sensitive information has been the core reason for the
penetration of online banking in everyday life.

According to the latest official figures from the office of National Statistics (ONS 2015) indicate
that subscriptions to the internet has grown more than 50% from 25 million in 2015 to 45 million
in 2016 in India.

It has also been estimated that 70% of the population in India use internet in their daily lives.
In the financial service provision internet has helped to reduce the costs of financial institutions
as well as helped client to use the service at anytime and from virtually anywhere with access to
an internet connection.

The use of electronic banking has removed personnel that facilitate the transactions and has
placed additional responsibilities on the customers to transact with the service.

The computerization of the banking operations has made maximum impact on: -

Internal Accounting System

Customer service
Diversification of system

The Conceptual Model of Internet Banking

INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our traditional
method of banking and is reluctant to use online banking.

But here are few cases where Internet banking will turn out to be a better option in terms of
saving your money.

'Stop payment' done through Internet banking will not cost any extra fees but when done through
the branch, the bank may charge you Rs 50 per cheque plus the service tax.

Through Internet banking, you can check your transactions at any time of the day, and as many
times as you want to.

On the other hand, in a traditional method,

you get quarterly statements from the bank and if you request for a statement at your required
time, it may turn out to be an expensive affair.
The branch may charge you Rs 25 per page, which includes only 30 transactions.

Moreover, the bank branch would take eight days to deliver it at your doorstep.
If the fund transfer has to be made outstation, where the bank does not have a branch, the bank
would demand outstation charges.

Whereas with the help of online banking,

it will be absolutely free for you.

As per the Internet and Mobile Association of India's report on online banking 2006, "There are
many advantages of online banking.
It is convenient,
it isn't bound by operational timings,
there are no geographical barriers and
the services can be offered at a less cost."

TYPES OF INTERNET BANKING OR E-BANKING

Three basic kinds of Internet banking are:.

Informational Internet Banking:
Informational Internet banking simply means the bank provides basic information about its
products and services, much like a bulletin. This is meant for marketing purposes only, and there
is no connection to the bank's main computer systems.

Communicative Online Banking

Communicative online banking allows for some communication between the customer and bank.
However, this is typically limited to fundamental interactions such as account inquiries, new
account updates, loan or mortgage applications, contact information updates and balances.
Communicative online banking may connect with the bank's main computer systems.

Transactional internet banking

Transactional Internet banking includes full control over your accountsdeposits, withdrawals,
transfers, updates and online payments. Increased security measures now make Internet banking
safe, secure and convenient, especially in the case of mobile online banking.

FEATURES OF E-BANKING

Transactional:

(e.g. performing a financial transaction such as an account to account transfer, paying a bill or
applications like applying for a loan, new account, etc.)

Electronic Bill Presentment and Payment (EBPP).

Funds transfer between customers own checking and savings accounts, or to another
customers account.
Investment purchase or sale.
Loan application and transactions such as repayments.

Non-transactional:

(e.g. online statements, Check links, Chat, Co-browsing etc.)

 Financial Institution Administration- features allowing financial institutions to manage the
online experience of their end users.

ADVANTAGES OF E-BANKING:-

Convenience-

Unlike your corner bank, online banking sites never close; theyre available 24
hours a day, seven days a week, and theyre only a mouse click away.

Ubiquity-
If youre out of state or even out of the country when a money problem arises,
you can log on instantly to your online bank and take care of business, 24\7.

Transaction speed-
Online bank sites generally execute and confirm transactions at or quicker than
ATM processing speeds.

Efficiency-
You can access and manage all of your bank accounts, including IRAs, CDs,
even securities, from one secure site.

Effectiveness-
Many online banking sites now offer sophisticated tools, including account
aggregation, stock quotes, rate alert and portfolio managing program to help you manage
all of your assets more effectively. Most are also compatible with money managing
programs such as quicken and Microsoft money.

Cheaper alternative: -

With increasing competition, it seems to be the cost factor that is driving banks
to offer the facility. The Internet is still a very cheap alternative to opening a physical
branch,

DISADVANTAGES OF INTERNET BANKING

Start-up may take time-

In order to register for your banks online program, you will probably have to
provide ID and sign a form at a bank branch. If you and your spouse wish to view and
manage their assets together online, one of you may have to sign a durable power of
attorney before the bank will display all of your holdings together.

Learning curves-
 Banking sites can be difficult to navigate at first. Plan to invest some time and\or
read the tutorials in order to become comfortable in your virtual lobby.

Bank site changes-

Even the largest banks periodically upgrade their online programs, adding new
features in unfamiliar places. In some cases, you may have to re-enter account
information.

HOW E-BANKING CAN EASE YOUR LIFE

Indian banks are trying to make your life easier. Not just bill payment, you can make
investments, shop or buy tickets and plan a holiday at your fingertips.

In fact, sources from ICICI Bank tell us, "Our Internet banking base has been growing at an
exponential pace over the last few years.

Currently around 78 per cent of the bank's customer base is registered for Internet banking." To
get started, all you need is a computer with a modem or other dial-up device, a checking account
with a bank that offers online service and the patience to complete about a one-page application--
which can usually be done online.

You can avail the following services.

1. Bill payment service: Each bank has tie-ups with various utility companies, service
providers and insurance companies, across the country. It facilitates the payment of :

electricity and telephone bills,

mobile phone,
credit card and
Insurance premium bills.

To pay bills, a simple one-time registration for each biller is to be completed. Most
interestingly, the bank does not charge customers for online bill payment.

2. Fund transfer:
Any amount can be transferred from one account to another of the same or any
another bank.

ICICI Bank says that online bill payment service and fund transfer facility have been
their most popular online services.

3. Credit card customers:

Credit card users have a lot in store. With Internet banking, customers can not only
pay their credit card bills online but also get a loan on their cards
4. Railway pass:
This is something that would interest all the aam janta.
Indian Railways has tied up with ICICI bank and you can now make your railway pass
for local trains online.
The pass will be delivered to you at your doorstep.

5. Investing through Internet banking:

Opening a fixed deposit account cannot get easier than this. An FD can be opened
online through funds transfer.
Online banking can also be a great friend for lazy investors. Now investors with
interlinked demat account and bank account can easily trade in the stock market and the
amount will be automatically debited from their respective bank accounts and the shares
will be credited in their demat account.

6. Recharging your prepaid phone:

Now there is no need to rush to the vendor to recharge the prepaid phone, every
time the talk time runs out.
Just top-up the prepaid mobile cards by logging in to Internet banking. By just selecting
the operator's name, entering the mobile number and the amount for recharge, the phone
is again back in action within few minutes.

7. Shopping at your fingertips:

Leading banks have tie ups with various shopping websites. With a range of all kind
of products, one can shop online and the payment is also made conveniently through the
account. One can also buy railway and air tickets through Internet banking.