CUSTOMER SATISFACTION TOWARDS ONLINE BANKING

Research Project Submitted In Partial Fulfillment of the

Requirements for the Degree of

B.COMHONOURS

ADARSH BILGAIYAN

DEPARTMENT OF COMMERCE
BHOPAL SCHOOL OF SOCIAL SCIENCES

APRIL 2021

Submitted by Guided by
ADARSH BILGAIYAN Dr. SMITHA PILLAI

Associate Professor
 CERTIFICATE

It is certified that the work contained in the project report titled “Customer Satisfaction Towards
Online Banking” by Adarsh Bilgaiyan has been carried out under my/our supervision and that
this work has not been submitted elsewhere for a degree*

Signature of Supervisor

Name:Dr. SMITHA PILLAI

Department: Commerce

Bhopal School of Social Sciences

APRIL, 2021
 DECLARATION
I hereby declare that this project report entitled “Customer Satisfaction Towards Online
Banking” was carried out by me for the degree of BCOMHon-ours Under the guidance and
supervision of Dr. Smitha Pillai, Assistant Professor of Department of Commerce, BSSS
College. The interpretations put forth are based on my reading and understanding of the original
texts and they are not published anywhere in any form. The other books, articles and websites,
whichIhavemadeuseofareacknowledgedattherespectiveplaceinthetext.Thisresearchreport is not
submitted for any other degree or diploma in any otherUniversity.

Place: Bhopal

Name of the Student: Adarsh Bilgaiyan

Class:- BCOM HONOURS

Date;-APRIL 2021
 ACKNOWLEDGEMENT

I would like to thank our Principal Dr. Fr. John P.J. and Vice Principal Dr. Sr. Sonia Kurien for their
immense support and blessings. I thank our HOD Dr. Amit Kumar Nag for his support. I would like to
express my special thanks of gratitude to my research guide Dr. Smitha Pillai, Associate Professor of
Department of Commerce for her valuable suggestions and guidanceand for giving me the golden
opportunity to do this wonderful research project on the topic‘Customer Satisfaction Towards
Online Banking, Without her help it would have been difficult for me to have reached this state of
completion of my project report. Also, I would like to thank my parents and friends who helped me a
lot in the preparation of this project.
I wish to acknowledge the help of all those who have provided me information, guidance and other
help during my research period.
TABLE OF CONTENTS

1. CERTIFICATE ii

2. DECLARATON iii

3. ACKNOWLEDGEMENT iv

4. APPENDIX v

5. CHAPTER ONE – Introduction 1

6. CHAPTER TWO – Literature Review 11

7. CHAPTER THREE – Research Methods 17

8. CHAPTER FOUR – Data Analysis 20

9. CHAPTER FIVE – Results and Discussion 29

10. REFERENCES 31

11. ANNEXURE 1 35

12. ANNEXURE 2 36
 CHAPTER 1
INTRODUCTION

1.1 RATIONALE OF THE STUDY

1.2 INTRODUCTION TO THE TOPIC

1.3 JUSTIFICATION OF THE TOPIC

INTRODUCTION

Banking is an industry that handles cash, credit and other financial transaction. Bank
provides a safe place to store extra cash and credit. A Bank is financial institution which
provides fundamental banking services like providing loans offers cash management services
etc.A bank interfaces client which have capital deficiencies to those clients with capital
surpluses.
Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays
out on customer's order."

Features of Banking:

i) Dealing in money:

The banks accept deposits from the public and advancing them as loans to the needy people.
The deposits may be of different types current, fixed, savings, etc. accounts. The deposits are
accepted on various terms and conditions.

ii) Payment and Withdrawal:

A bank provides easy payment and withdrawal facility to its customers in the form of
cheques and drafts. It also brings bank money in circulation. This money is in the form of
cheques, drafts, etc.

iii) Dealing with credit:

The banks are the institutions that can create credit i.e., creation of additional money for
lending. Thus, “creation of credit’ is the unique feature of banking.

iv) Commercial in nature:

Since all the banking functions are carried on with the aim of making profit, it is regarded as
a commercial institution.

v) Nature of agent:
Besides the basic function of accepting deposits lending money as loans banks possess the
character of an agent because of its various agency services like collecting bills, draft,
cheques, etc.

History of banking in India:

There are three different phases in the history of banking in India.

➢ Pre-Nationalization Era.
➢ Nationalization Stage.
➢ Post Liberalization Era.

● Pre-Nationalization Era:

In India the business of banking was practices even in very early times. The remittance of
money through Hundies, an indigenous credit instrument, was very popular. The Hundies
were issued by bankers known as Shroffs, Sahukars, Shahus or Mahajans in different parts of
the country. Agency Houses of Calcutta and Bombay developed modern type of banking
after the establishment of rule by the East India Company in 18th and 19th centuries.

During starting phase of the 19th Century, volume of foreign trade was relatively small.
Later, as the trade expanded, the need for banks of the European type was felt and the
government of the East India Company took interest in having its own bank. The government
of Bengal took the initiative and the first presidency bank, the Bank of Calcutta (Bank of
Bengal) was established in 180. In 1840, the Bank of Bombay and IN 1843, the Bank of
Madras was also set up.

These three banks also known as “Presidency Bank”. The Presidency Banks had their
branches in important trading centers but mostly lacked in uniformity in their operational
policies

The Government amalgamate these three banks in to one and as a result of which the
Imperial Bank was set up in 1921. The Imperial Bank of India acted like a Central bank and
as a banker for other banks.
The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the
Country. In 1949, the Banking Regulation act was passed, and the RBI was nationalized and
acquired extensive regulatory powers over the commercial banks. In 1950, the Indian
Banking system comprised of the RBI, the Imperial Bank of India, banks, Exchange banks
and Indian Joint Stock banks.

● Nationalization Stages:

After Independence in 1951, The Imperial Bank of India and ten others bank amalgamated to
established bank called the State Bank of India (SBI). The Imperial Bank of India was
nationalized in 1955 as the State Bank of India.
The main objective of establishing SBI by nationalizing the Imperial Bank of India was “to
extend banking facilities on a large scale more particularly in the rural and semi-urban areas
and to diverse other public purposes.”
In 1959 the SBI (Subsidiary Bank) act was proposed and the following eight states associated
banks were taken over by the SBI as its subsidiaries.

Name of the Bank Subsidiary with effect from

1. State Bank of Hyderabad 1st October 1959

2. State Bank of Bikaner 1st January 1960
3. State Bank of Jaipur 1st January 1960
4. State Bank of Saurashtra 1st May 1960
5. State Bank of Patiala 1st April 1960
6. State Bank of Mysore 1st March 1960
7. State Bank of Indore 1st January 1968
8. State Bank of Travancore 1st January 1960

On 19th July 1969, The Prime Minister Mrs. Indira Gandhi announced the nationalization of
14 major scheduled Commercial Banks each having deposits worth above Rs. 50 crores. This
was a turning point in the history of commercial banking in India.
Later the Government Nationalized six more commercial private sector banks with deposit
liability of not less than Rs. 200 crores on 15th April 1980, viz.

➢ Andhra Bank.
➢ Corporation Bank.
➢ New Bank of India.
➢ Oriental Bank of Commerce.
➢ Punjab and Sind Bank.
➢ Vijaya Bank.

● Post-Liberalization Era-Thrust on Quality and Profitability:

The need for restructure the banking industry was felt greater with the initiation of the real
sector reform process in 1992. The reforms have increased the opportunities and challenges
for the real sector making them operate in a global market. However, to harness the benefits
of globalization, there should be an efficient financial sector to support the structural reforms
taking place in the real economy. Hence, along with the reforms of the real sector the
banking sector reformation was also addressed.

The main causes for the lack performance of banks are:

● Regulated interest rate structure.
● Lack of focus on profitability.
● Lack of transparency in the bank’s balance sheet.
● Lack of competition.
● Excessive regulation on organization structure and managerial resource.
● Excessive support from government.

Banking services:

Banking in India is so convenient and hassle free that one (individual, groups or whatever the
case may be) can easily process transactions as and when required. The most common
services offered by banks in India are as follows:

➢ Bank accounts: It is the most common service of the banking sector. An individual can
open a bank account which can be either savings, current or term deposits.
➢ Loans: You can approach all banks for different kinds of loans. It can be a home loan,
 car loan, personal loan, loan against shares and educational loans.
➢ Money Transfer: Banks can transfer money from one corner of the globe to the other by
issuing demand drafts, money orders or cheques.
➢ Credit and debit cards: Most banks offer credit cards to their customers which can be
used to purchase products and services or borrow money.
➢ Lockers: Most banks have safe deposit lockers which can be used by the customers for
storing valuables, like important documents or jewelry.

Classification of Banking Industry in India

Indian banking industry has been divided into two parts, organized and unorganized sectors.
The organized sector consists of Reserve Bank of India, Commercial Banks and Co-operative
Banks, and Specialized Financial Institutions (IDBI, ICICI, IFC etc.). The 28 unorganized
sectors, which is not homogeneous, is largely made up of money lenders and indigenous
bankers.
1.2 JUSTIFICATION OF THE TOPIC

INTERNET BANKING: Internet banking is the system that provides the facility to the
customer to conduct the financial and non-financial transactions from her/his net banking
account.

Features of Internet Banking:

➢ The customer can view account statements.

➢ Customer can check the history of the transactions for a given period by the concerned
bank.
➢ Bank statements, various types of forms, application can be downloaded.
➢ The customer can transfer funds, pay any kind of bill, recharge mobiles, DTH
connections etc.
➢ The customer can buy and sell on e- commerce platforms.
➢ The customer can invest and conduct trade.
➢ The customer can book transport, travel package and medical packages.

As rapid increase in number of Indian banks therefore they started looking innovative ways,
such as Online banking, to make a customer's banking experience more convenient,
efficient, and effective, it becomes even more important to ascertain the customer’s
perception of the overall service quality and their satisfaction with the current online banking
services. Measuring customer satisfaction can provide banks useful information about
customer loyalty that help them for forming effective strategies that can be used to provide
efficient customer service. Globalization helped banks to expand their reach beyond
countries and continents and made them highly competitive. It’s getting difficult for these
financial institutions to simply compete based on price.
Banks are, therefore, looking at other ways, e.g. offering Internet banking services, to
maximize profits as well as retain their loyal customer base. However, this cannot be
accomplished without high service quality, which constantly fulfills changing customer
needs, results in improved customer satisfaction.

Major Problems Faced by India’s Nationalized Banks:

❖ Problem # 1. Losses in Rural Branches:

Most of the rural branches are running at a loss because of high overheads and prevalence of
the barter system in most parts of rural India.

❖ Problem # 2. Large Over-Dues:

The small branches of commercial banks are now faced with a new problem. A large amount
of overdue advances to farmers. The decision of the former National Front Government to
waive all loans to farmers up to the value of Rs. 10,000 crores have added to the plight of
such banks.

❖ Problem # 3. Non-Performing Assets:

The commercial banks at present do not have any machinery to ensure that their loans and
advances are in fact, going into productive use in the larger public interest. Due to a high
proportion of non-performing assets or outstanding due to banks from borrowers they are
incurring huge losses. Most of them are also unable to maintain capital adequacy ratio.

❖ Problem # 4. Competition from Non-Banking Financial Institution:

As far as deposit mobilization is concerned, commercial banks have been facing stiff
challenges from non-banking financial intermediaries such as mutual funds, housing finance
corporations, leasing and investment companies. All these institutions compete closely with
commercial banks in attracting public deposits and offer higher rates of interest than are paid
by commercial banks.
 E-Commerce
Conducting businessthrough
electronicnetworks

E-Finance E-Money
Providing financial services Stared Values orprepaid
through electronic channels paymentmechanisms

E-Banking Other financial servicesand

Providing banking products and products
services through electronicdelivery
channels insurance, online brokering etc.

Internet Telephone Other electronic

Banking Banking delivery channels

Internet Banking: DistributionChannels

Today, internet has evolved as the prime medium of service delivery for various financial
institutions. Earlier to this, customers were not able to perform their personal and
commercial banking transactions with such fast speed as they can perform with internet
banking. The internet facility enables banks to perform their traditional activities on a
virtual medium, which they use to perform earlier in their branches.

Besides having a large internet user population, most banks are still having
awidebranchnetworkthatdeliverssameproductsandservicesthatareavailableonline. There
must be few opportunities to address this service overlap existed between two
distributional channels.
Modes of Distribution:

Internet Banking: It is also known as Web Banking or PC Banking or e-Banking. The easy
accessibility to internet facility and availability of computer lead the banks to provide their
products and services through new delivery medium i.e. internet. Today, all private and
public sector banks are providing e-banking services to theirclients.

➢ Phone Banking: It is also known as Tele-Banking or Mobile- Banking orM-

Banking. India has experienced tremendous increase in the number of mobile phone users.
The rate of penetration of mobiles and landlines has risen significantly, and this leads to
encourage banks to grab this opportunity and thus offered mobile-banking services. Through
this service customers can avail information regarding the bank account by sending aSMS.

➢ Plastic Money:

It is referred to ATM cards, debit cards and credit cards etc. Banks have provided ATM
facility to their customers and it is connected via V- SAT. Through using ATM, customers
can avail a numerous service, such as withdrawal of funds, account balance enquiry, order a
cheque book, deposit fund, have information regarding banking products etc.

Even through ATM banks are offering value added servicesalso.

Recharge of prepaid mobile card is offered by Punjab National Bank who has tie ups to use ATM
of banks as: HDFC andSBI; PNB, UTI and Global Trust Bank.

E-Banking has transformed not only the banking relationships but transformed the whole
banking industry. The e-banking, therefore taken as a mandate by the banks rather than just
an additional feature in most of the developed nations, as it is the economical medium to
cater the banking customers. Today banking is not restricted to the traditional physical
branch system, where banking staff need to be their personally for enabling banking
transactions. But still there is strong requirement of customer awareness regarding e-
banking facility prevails in India and it can serve through proper scanning and analysis of
themarket.
Through e-banking customers can process any banking transaction without even visiting
bank branch at any time anywhere and this is known as “anywhere banking”. Providing e-
banking is no more considered as an additional feature of a banking institution, but now it
has become an essential feature of a bank.has become an essential feature of a bank.
 CHAPTER 2
LITERATURE REVIEW

2.1NATIONAL REVIEWS

2.2INTERNATINAL REVIEWS
 LITERATURE REVIEW

Introduction:

The main aim of this literature review is to study and analyse e-banking with respect to banking
service quality, consumer satisfaction, consumer behaviour, adoption of technology, trust,
customer loyalty, brand preference etc. Books, Journals, Published research papers related toe-
banking in India were also referred in thisreview.

NATIONAL REVIEWS
Kulkarni & Desai, 2004
The private Indian banks have overshadowed foreign banks in terms of brand recognition. Even
capital market products are being offered along with banking products. Customers can retrieve
information or request services/transactions through Internet, Interactive Voice Response
(I.V.R.), call centre, cell phones and ATMs. Product-centric view has now been replaced by
customer-centric view. One of the most important developments is introduction of Expert
systems into banking sector. An expert and intelligent system knows about certain categories of
problems and can provide solutions or guidance if the user can supply answers to its questions.
An Expert system is designed for a specific field of problems and not as a general tool

Murli & Subbakrishna, 2012

Cash is the focal point of the fund flow in every business. However, cash has been used as a
narrow term representing currency notes or coins only. Therefore, to overcome this deficiency
Reserve Bank of India introduced number of e-banking initiatives to develop paperless
payment and the new settlement systems like Electronic Clearing System (Credit/Debit),
Electronic Fund Transfer (EFT), National Electronic Fund Transfer (NEFT), Real Time Gross
Settlement System (RTGS) etc. Now customers use internet banking facility as information
point and as counter of a bank as well.
Gupta & Gupta,2013
Saving money is currently no longer kept to the outskirt of branches were one needs to
approach the branch face to face, to pull back money or store a check or demand an
announcement of records. In genuine model of Internet managing an account, any request or
exchange is prepared online with no physical reference to the branch (anyplace keeping money)
whenever. Giving Internet managing an account is progressively turning into a "need" than a
"decent to have" benefit. The net keeping money, accordingly, now is even more a standard
instead of an exemption in many created nations because of the way that it is the least
expensive method for giving managing an account benefit.

Agarwal,2012
Today, any house PC is capable of carrying out banking and shopping via internet. Remote
banking has significant advantages for the service providers, achieves greater efficiency
internally and helps to provide its customers an improved level of service, and opens intelligent
marketing options. The customer can control performance of portfolio, flow of savings and
current accounts, view market dynamics and changes, do scenario analysis, run queries and
execute transactions on a real time basis, anytime anywhere).

Muraleedharan, 2009
Biggest advantage of using computers in banking is better customer service. Computerised banks
respond quickly to service requests of customers. E-banking uses infrastructure made for current
digital age to create local and global opportunities. E- banking encompasses broad range of
operations like electronic mail to improve communication, provision of online information and
service, efficient and cost-effective services and non-physical interaction

Kumar, 2010
Other coin side of e-banking is that it’s susceptible to risks related to governance, legal,
operational and reputational matters. Therefore, policy matters have modified their regulatory
rules to achieve basic goals of: ensuring safety and soundness of banking, market discipline
protecting customer rights and public trust in e-banking systems
 INTERNATIONAL REVIEWS

Wesley Van Derdeiil (2008) in his study “Swed Bank Versus Rabo Bank. A comparison of
The Services Marketing Mix” aimed at finding difference between swed bank and Rabo bank
services. Within the subject services, the study has aimed towards finding the difference and
similarities between the service marketing mix of Swed bank and Rabo bank. The study also
focused on the activities held in order to support the services marketing mix. Small differences
were found in marketing research, products, marketing communication, and HRM and service
scope.

Ashfaq Ahmad (2009) “A Comparative Study of Islamic Banking in Pakistan: Proposing

and Testing a Model” was conducted to compare the responses regarding service quality,
customer satisfaction and bank performance of Islamic and conventional banks operating in
Pakistan. The results show that male customers are greater than female customers that were
using products/services of selected banks working in Pakistan. It could be linked with findings
that customers of Islamic banks have awareness but showed dissatisfaction regarding some of
the products of Islamic banks. However, results indicate that service quality offered by Islamic
banks leads to greater satisfaction among Islamic banks customer as compared to customer of
conventional banks. The results show that there is strong direct and positive relationship between
service quality and customer satisfaction in Pakistani banking sector.

Uma Sankar, Bibhuti Bhusan, Saroj Kanta, Bidhu Bhusan (2010) made a
comparative study on “Employee Evaluations of Customer Satisfaction: A Comparative Study
Between Public and Private Banks in India” and found that good premises and suitable location
of the branch are essential for bank branches for smooth operation of banking business. When
the private banks are compared with public sector banks, all the private banks have excellent
locations from business point of view compared to public banks. Getting high value customers or
more business from the existing customers is being adapted as the major strategies by the public
sector banks, which is not true in case of private sector banks. For providing better service to
customers proper training should be given to the staff by the banks. The rate of vanishing
customers is higher in case of urban large-sized public sector banks. The more attractive private
banks can attract new customers. Public sector banks invest and concentrate more on staff
development where as private sector gives more priority on infrastructural aspects.
Kumbhar (2011) concentrated on demographic profile of the customers and its association
with observation about administration quality, benefit value and general fulfilment in e-
managing an account. He found that, demographic attributes (aside from sex) were impacting
seen benefit quality, saw value and fulfilment in e-heating. Comes about demonstrated that,
apparent administration quality, saw value from e- managing an account administration and
general fulfilment in e-keeping money vary by age aggregate, level of training, calling of the
customers and wage level of the customers. Be that as it may, no distinction in impression of
administration quality saw value and general fulfilment in e-managing an account by sex was
found. On the premise of his outcomes he prescribed brokers to build up their administration and
elements of e-managing an account benefit as per the unique needs of the customers having a
place with different age bunches, level of training, calling and pay level. He likewise found that
youthful, exceedingly taught and higher wage expect more components in e-keeping money
since they have smart thought about utilizing cutting edge administrations.

Sarokolaei, Rahimipoor, Nadimi & Taheri (2012) reviewed the literature to decipher
four categories of draw backs of e-banking related infrastructure i.e. professional and technical
barriers, legal and social barriers, strategic barriers, and financial and economic barriers. They
investigated about these four draw backs in e- banking industry in Iran. They collected data from
100 e-banking professionals through questionnaires. Their statistical analysis revealed that
except financial and economic limitations; other barriers are as an obstacle to the development of
e- banking.

Ariff, Yun, Zakuan & Ismail (2013) tested the relationship and the impacts of e-SQ and
e-Satisfaction on e-Loyalty in internet banking. They designed modified version of E-
SERVQUAL instrument to determine e-SQ for internet banking service of a commercial bank in
Malaysia. Respective Data was collected from 265 internet banking customers. Their findings
revealed that e-SQ for the internet banking service constitute assurance-fulfilment, efficiency-
system availability; privacy, contact- responsiveness and website aesthetics and guide. It was
also noticed that e-Satisfaction was positively impacted by website aesthetics and Guidelines,
Efficiency- System availability and Contact-Responsiveness. E-Satisfaction was positively
significant to e-Loyalty. E-Satisfaction partially mediated the association of Website aesthetics
and Guide of e-SQ and customer e-Loyalty. They observed that some of the important features
to internet banking users are attractiveness and appearance of banks website, and the data and
guidance provide by the websites. The study reflected that in internet banking, apart from
technical and functionality aspects of banks website e-SQ, the aesthetic value and proper
guidance of the websites are also important to ensure quality of e-SQ that leads to e-Satisfaction
and e-Loyalty.

Amran, Rahman, Yusof, and Mohamed(2014) critically dissected the present

practices of the Islamic Microfinance Institutions (IMFIs) in the parts of the social values from
the Islamic view point that can give a positive commitment to Islamic microfinance, the
utilization of Mobile Banking on its ability to upgrade the entrance of money related
administrations, and the usage of Mobile Banking in encouraging the bookkeeping data
framework. They watched that religion plays a critical component in the accomplishment of
social values and execution and IMF is an intense instrument to wipe out destitution. They
prompted that IMF must be executed as per shariah-agreeable methodology as it covers the
competency of IMFI's Accounting Information Systems (AIS) in monitoring its bookkeeping
action in conjunction with IT assets which basically incorporate the arrangement of advance
reimbursements and dispensing. They arrived at such conclusion that Mobile Banking (MB) is a
fitting system for cost lessening and upgrade of adaptability, since it offers financially savvy
benefit conveyance directs in accomplishing the objective of financing the poor in the remote
zones and MFIs will have the capacity to settle overhead expenses and there will be a
diminishment of operation expenses as manual gathering and money taking care of.

Akhisar, Tunay and Tunay (2015) investigated the endeavours of the bank's
profitability execution of electronic-based keeping money administrations. They dissected
impacts of ROA and ROE execution through data of 23 created and building up nations'
electronic saving money benefits between 2005 to 2013 by element board data strategies. They
found that bank profitability of created and creating nations been impacted from the proportion
of the quantity of branches to the quantity of ATMs is exceedingly huge and electronic keeping
money benefits in critical. They found that a few factors are as opposed to the normal negative
relationship, as a result of differing qualities in the level of improvement of the nations, the
socio-social structure and electronic managing an account framework.
Baptista and Oliveira (2016) proposed a hypothetical model as for factors affecting
acknowledgment of portable saving money client. They integrated perceptions from existing
research to overhaul it to ebb and flow best in class information. They utilized a mix of weight
and meta-investigation to discover the recurrence and significance of the most utilized develops
and their connections. They shortlisted 57 articles with essential quantitative factual data. They
watched that best predictors of the aim to utilize the versatile keeping money administrations
were disposition, introductory trust, saw hazard, and execution hope. As far as utilization of
versatile keeping money the best foreseeing factors were goal and execution hope. Not with
standing that, they discovered rundown of the most imperative predictors like encouraging
conditions on demeanor, undertaking innovation fit on execution hope, and execution hope on
starting trust.

Nicholas M Odhiambo (2017) ‘Mobile Banking Usage, Quality of Growth, Inequality and
Poverty in Developing Countries’ A study that enquire into the relationship between mobile
banking & inclusive development that includes quality of growth, in equality and poverty. The
conclusion that can be drawn out is that mobile banking application will play a supreme role in
responding to the problems of deficient growth, inequality & poverty of the developing
countries.

Arthi and E. Kavitha (2018) has studied ‘A Study on Customer Satisfaction towards
Mobile Banking’ in the emerging technology the banks marked around the globe by Mobile
banking(m-banking). Banks conduct financial services through wireless and instant as per the
convenience of customers between smart phone and tablet the influence of Mobile banking
towards the customer satisfaction is the purpose of this research and also identify the key factors
of mobile technology. Mobile banking is the interface between financial services and telecoms.
In Mumbai,29th March 2012, Dr.K C Chakrabarty, Deputy Governor of the Reserve Bank of
India, summit “Regulation of cross-border mobile payments and regional financial integration”
at the International Banking, out of it the regulations and rationale has been framed for Mobile
Banking. Reserve Bank of India (RBI) has authorized 154 banks in the country to undertake
mobile banking services. Mobile banking penetration in the country is greater than the global
average of 40% at more than 50%. The research is to conduct the customer satisfactory level
towards the m-banking, for that 146Questionnaires are used to conduct data collection and then
analyzed using statistical techniques: regression analysis, correlation and factor analysis. The
significance of customer’s are concerns about the security, innovative services, customer trust
and risk are the key indicators of the technology adoption.
 CHAPTER-3

RESEARCH METHODOLOGY

3.1 OBJECTIVES OF THE STUDY

3.2 RESEARCH HYPOTHESIS
3.3 SCOPE OF THE STUDY
3.4 RESEARCH METHODOLOGY
3.5 LIMITATION OF THE STUDY
 3.1 OBJECTIVES OF THE STUDY

The objective of the study is to identify the factors that affect customers towards online banking.
Below are the objectives of this study
1. To identify the level of security and privacy of customer towards online banking
services.
2. To examine the customer loyalty towards online banking.
3. To examine the quality of online banking facilities provided to the custome

3.2 RESEARCH HYPOTHESIS

H0- Customer is not satisfied with online banking
H1- Customer is satisfied with online banking services.

3.3 SCOPE OF THE STUDY

• The scope of the study is limited to Banking Sector And its Online Functioning
• This study is confined to Online Transaction limited only

3.4 RESEARCH METHODOLOGY

Introduction:

This chapter explains research methodology of the research which is the systematic way of
conducting research. Research methodology is meant as the systematic and scientific way for
problem solving or finding the facts. This chapter reveals how the present study was conducted.

It explains research methods, techniques and logic behind the study. Each research needs own
design to solve problems or finding truth. This study investigates consumer behaviour towards
banking
(e-banking). Banking system plays a critical role in financial market in any society and
obviously banking system as service section, needs to provide qualified service for users of the
financial market.
Electronic banking plays very important role in today’s business and human life. E-banking creates
banking service and opportunities for bankers to provide high quality services which increase speed
and efficiency of its branches, all around the world. Customers can access to bank services without
physical presence through safe channels of communication. E- banking services customers can carry
out their own banking operations without having the physical presence at the branches through the
communication channels of safely at any time of the day (24 hours).

Study Design:
The study adopted is descriptive sampling design. The descriptive survey was chosen considering the
purpose of the study, the research questions and the magnitude of the target population. The purpose
of using descriptive surveys is to collect detailed and factual information that describe an existing
phenomenon. A survey questionnaire was developed to collect data for the study. The primary data
was collected through this form of questionnaire and was hand delivered to the target population. This
study is a descriptive survey because it adopted the use of questionnaire aimed at finding the impact of
customer satisfaction towards online banking performance. Descriptive research involves gathering
data, describes phenomenon and then organizes, tabulates, depicts and describes data collection, in the
form of graphs and charts, in order to help the reader, understand the distribution of data.

ResearchProcess:
Research process presents overview of series, actions, steps which are necessary to conduct research
effectively. In this research seven steps are taken to effectively carry out of research.
These steps are statement of research problem, review of previous studies conducted on the subject,
variables definition, setting objectives and formulation of hypotheses, research design and sample of
the study, data collection, data analyses.

Geographical Area:

I will be conducting this research within the geographical boundaries of Bhopal, Madhya
Pradesh.
Duration of Study:
I have done 1-month study about the topic “Customer Satisfaction Towards Online
Banking”.

SampleSize:

A sample of about 35 people selected from the target population they were provided with
the questionnaire.

Sample size distribution

Section Sample size distribution

Friends 10

Family members 10

Other's 15

Total 35

Sample Technique:

The sample technique used is random sampling. Random sampling is an unbiased approach to collect
the responses from group of people. Random sampling uses common recording skills and standard
observation techniques to collect information. It does not require the individuals who are being
studied to have specific skills or life experiences to create useful data. This process can also remove
the classification errors that can occur in other forms of information collection.

Data CollectionProcedure:

The type of data collected is primary data and the collection tool is a self-administered questionnaire
given to target population of Bhopal. The first part of the questionnaire collected demographic data of
the respondents such as age group, gender qualification, .The second part is concerned with the effect
of efficiency of banking services, customer satisfaction , frequency of user use online banking.
The questionnaire contains multiple choice options. This questionnaire is convenient in many ways.
Firstly, the respondents answer at their convenience. Secondly, there is no need to set up interview
appointments. Furthermore, no interviewer is present to inject bias in the way of questions asked.

3.5 LIMITATION OF THE STUDY

• The study is based on Primary Data, obtained from the Individuals and as its finding depends
entirely on the accuracy of such data.
 CHAPTER 4
DATA ANALYSIS AND
INTERPRETATION

4.1 DATA REPRESENTATION AND INTERPRETATION

4.2 HYPOTHESIS TESTING

3.1 Data analysis and interpretation

This chapter discusses the results of the findings of the data analyzed from the questionnaires.
The data was analyzed based on the research objectives and questionnaire items using a
statistical tool to generate frequency distribution tables, charts and the results are hereby
presented.

Data Analysis Procedure:

The results are analyzed and converted into percentages. Data for the various research
questions are analyzed using percentages obtained to show the distribution of opinions
and perceptions of respondents. The data is presented in a convenient and informative
way including pie charts for easier analysis and interpretation.

QUESTIONNAIRE ANALYSIS:

4.1 Age

The respondents were asked to indicate the age group they belonged to and the results are as
shown Figure 4.1 below shows that 57.1 % of the respondents are between 18-25 years of age,
28.6 % are between 25-35 years, 8.6 % are between 35-45 years of age, 5.7% are above 45. This
shows that majority of the respondents are aged between 18 and 25 years.

Figure 4.1
4.2 Gender

The respondents were asked to indicate their gender and the results are shown below. Figure 4.2 is
indicative of the results which were obtained where 34.3 % of the respondents were female and
65.7% were male. This shows that majority of the respondents are male.

Figure 4.2

4.3 Qualification
The respondents were asked to indicate their qualification and the results are shown below. Figure
4.3 is indicative of the results which were obtained where 42.9% of the respondents were Graduate,
31.4% were Below Graduate, 17.1%were professional and 8.6 % were P.G.
This shows that majority of the respondents are male.
 Figure 4.3

4.4 Do You Think E-Banking Services Are Necessary In Present Scenario?

The respondents were asked - Do they think e-banking services are necessary in present scenario and
the results are shown below in Figure 4.4 and results obtained where 94.3% of the respondents’
response yes, 5.7 % of respondent response no. This shows that majority of the respondents feel that
e-banking services are necessary.

Figure 4.4

4.5 How long have you been using Internet Banking?

The respondents were asked that how long have you been using Internet Banking and the results are
shown below in Figure 4.5 and results obtained where 68.6% of the respondents response they are
using internet banking from more than 1 year ,25.7 % of respondent response they are using internet
banking from 1 to 6 month ,5.7 % response they are using internet banking from less than 1 month
.This shows that majority of the respondents are using e-banking services more than 1 year .
Figure 4.5

4.6 Which Factor Promotes You to Use the New Techniques in E--Banking?

The respondents were asked that which factor promotes you to use the new techniques in e-baking
and the results are shown below in Figure 4. 6 and results obtained where 74.3 % of the respondents’
response all the above reason promotes them, 8.6 % respondent response they promote by reduced
transaction time, 8.6 % of respondents’ response cost effectiveness promote them, 8.6 % of
respondent response they promote by ease of use. This shows that majority of the respondents
promote by all reasons mentioned (reduced transaction time, cost effectiveness, ease of use).

Figure 4.6
4.7 How frequently do you use mobile banking services per month (for example -
balance inquiry, fund transfer between account)?
The respondents were asked that how frequently do you use mobile banking services per month (for
example - balance inquiry , fund transfer between account) results are shown below in Figure 4.7 and
results obtained where 40 % of the respondents response they use mobile banking services more than
10 times in a month, 31.4% of the respondent response they use mobile banking services 5 to 10
times in a month, 25.7% of respondents response they use mobile banking services 1 to 5 times in
a month, 5.7% of respondents response they never use mobile banking services in a month .This
shows that majority of the respondents use mobile banking services more than 10 times in a month.

Figure 4.7

4.8 How frequently do you visit bank per month?

The respondents were asked that how frequently do you visit bank per month and results are shown
below in Figure 4.8 and results obtained where 54.3% of the respondents response they never visit
in a per month, 31.4% of the respondent response they visit bank 1 to 5 times per month, 8.6% of
respondents response they visit bank 5 to 10 time per month banking services 1 to 5 times in a
month, 5.7% of respondents response they never visit bank more than 10 times per month . This
shows that majority of the respondents never visit bank in a month
Figure 4.8

4.9 What type of issue you are facing while using E-Banking services?
The respondents were asked that what type of issue you are facing while using E-banking services
results are shown below in Figure 4.9 and results obtained where 37.1% of the respondents response
they face data privacy and confidentiality issue, 34.3% of the respondent response they faces
internet connectivity issue, 14.3% of the respondent faces unauthorized access within the network
and loss or damage of data by hackers issue, 14.3% of the respondent response they faces lack of
knowledge on the usage of E-Channels issue .This shows that majority of the respondents faces data
privacy and confidentiality issue while using E-Banking services.

Figure 4.9
4.10 Are You Satisfied With E-Banking Services You Are Receiving?
The respondents were asked are you satisfied with e-banking services you are receiving results are
shown below in Figure 4.10 and results obtained where 85.7 % of the respondents’ response yes and
14.3% of the respondent response no. This shows that majority of the respondents are satisfied with
the E- Banking services they are receiving.

Figure 4.10

4.11 Give Rating To E-Banking Services You Are Receiving?

The respondents were asked to give rating to e-banking services you are receiving results are shown
below in Figure 4.11 and results obtained where 40 % of the respondents response very good and
28.6.% of the respondent response good, 25.7 % of the respondent response excellent, 2.9 % of the
respondent response average, 2.9 % response below average This shows that majority of the
respondents give very good rating to the services they are receiving.
 Figure 4.11

4.2HYPOTHESIS TESTING
H0- Customer is not satisfied with online banking
H1- Customer is satisfied with online banking services.

Going through the survey the main problem lies that still customers are afraid of hacking of
accounts and thus do not go on for internet banking

After overall analysis it is conclude that Null hypothesis is retained as The Questionaries’ result
shows us customer are not satisfied with the online banking as they face many personal and social
challenges.
 CHAPTER-5
RESULTS AND DISCUSSION

5.1 MAJOR FINDINGS

5.2 DISCUSSION AND SUGGESTION
5.3 CONCLUSION
 RESULTS AND DISCUSSIONS

The purpose of this study is to find out customer satisfaction towards online banking. This research
study was directed with a set of hypotheses which relate directly to the research questions. Data was
gathered through close ended questionnaires. The study adopted a descriptive research design. The
population of this study comprised of people of Bhopal. The sampling frame for this study consisted
of people living in Shakti Nagar Bhopal. The random sampling method was used in the study to select
the respondents from the people living in Shakti Nagar, in order to capture the entire population, thus,
the sample size of the study was 35.

Primary data for the study was collected using a structured questionnaire. Descriptive analysis was
used to determine the proportions and frequency of the variables.

This study attempted to identify key quality attributes of internet banking services by analyzing
internet banking customers and their comments on banking experience. The finding of this study
shows that despite of many advantages of online banking but only 40% of the respondent use online
banking more than 10 times in a month. Although every bank today provides the facility of online
banking but 25.7% of respondent use 1 to 5 times in a month. The reason is that in case of internet
banking interpersonal interaction with customer is seldom possible. Identification and measurement of
customer’s expectation of the internet banking services provide a frame of reference and their related
quality dimension. Therefore, the implementation of quality initiates should begin with defining
customer’s need and performance and their train their customers for using internet for the banking
account. Going through the survey the main problem lies that still customers are afraid of hacking
of accounts and thus do not go on for internet banking. Banks are trying their level best by
providing the best security options to the customers but then there are many factors which betrays a
customer from opening an internet bank account.

Banks are providing internet banking services for free so that the customers can be attracted. By
asking the bank employees, we came to know that maximum numbers of internet bank account
holders are youth and businessmen. E-Banking is an innovative tool that is fast becoming a necessity.
It is a successful strategy for bank to remain profitable in a volatile and competitive marketplace for
today. Proper training should be given to customer by the bank employees to open an account as it
will be really beneficial and secondly the website should be made friendlier from where the first time
customer can directly create and access their account. In future, along with the availability of
technology and surety, safety and privacy of e-transaction and the RBI guide lines on various aspects
of internet banking will definitely help in rapid growth of internet banking in India.

Based on the study performed, researcher found out that most of the customers are satisfied by the
online banking services provided by banks. 85.7 % of the respondent are satisfied by the services they
are receiving. Also, there are some group of people not feel secure coming in online platform. Bank
need to change or improve their services. Some recommendationand suggestion are given by
researcher to bank what changes or improvement can be make so that banks able to satisfied most
number of customer.

RECOMMENDATIONS AND SUGGESTIONS

We can see the time is changing and with the passage of time people are accepting technology there
is still a lot of perceptual blocking which hampers the growth it’s the normal tendency of a human not
to have changes work on the old track ,that’s also one of the reason for the slow acceptance of internet
banking accounts.

➢ Banks should obey the RBI norms and provide facilities as per norms, which are not being
followed by the banks. While the customer must be given the prompt services and the bank
officers should not have any fear on mind to provide the facilities as per RBI norms to the units
going sicks.

➢ Internet banking facility must be made available in all branches of the banks.

➢ Each section of the bank should be computerized even in rural areas too.

➢ Personalized banking should be given a thrust as more and more banks are achieving in usual
services.
➢ Covering up the towns in rural areas with ATMs so that the people in those area can also avail the
better services.

➢ Prompt dealing with permanent customers and speedy transaction without harassing the
customers.

➢ Give proper training to customers for using e-banking.

➢ Create a trust in mind of customers towards security of their accounts.

➢ Provide a platform from where the customer can access different account at single time without
extra charge
 REFERENCES

❖ Tnau.ac.in. (2016). Banking & Credit: Banking An Overview. Retrieved from

http://agritech.tnau.ac.in/banking/crbank_overview.html

❖ Bachelor, B. (2016). The History of E - Banking. Retrieved from

http://www.ehow.com/about_5109945_history-ebanking.html

❖ Capgemini. (2012). A Case for Enterprise Data Management in Banking. Retrieved from
https://www.in.capgemini.com/resource-file-
access/resource/pdf/A_Case_for_Enterprise_Data_Management_for_Banking.pdf

❖ RBI. (1988). Committees on Computerization. Retrieved August 15, 2016, from

https://www.rbi.org.in/scripts/PublicationsView.aspx?id=162

❖ Wikipedia. (2016). Banking in India. Retrieved August 15, 2016, from

https://en.wikipedia.org/wiki/Banking_in_India#Current_period

❖ Asad, M. M., Mohajerani, N., & Nourseresh, M. (2016). Prioritizing Factors Affecting
Customer Satisfaction in the Internet Banking System Based on Cause and Effect
Relationships. Procedia Economics and Finance, 36(16), 210–219.
http://doi.org/10.1016/S2212-5671(16)30032-6

❖ Malaquias, R. F., & Hwang, Y. (2016). An empirical study on trust in mobile banking: A
developing country perspective. Computers in Human Behavior, 54, 453–461.
http://doi.org/10.1016/j.chb.2015.08.039

❖ Shaikh, A. A., & Karjaluoto, H. (2014). Mobile banking adoption: A literature review.
Telematics and Informatics, 32(1), 129–142.
http://doi.org/10.1016/j.tele.2014.05.003
❖ Veríssimo, J. M. C. (2016). Enablers and restrictors of mobile banking app use: A fuzzy set
qualitative comparative analysis (fsQCA). Journal of Business Research, (Article in press).
http://doi.org/10.1016/j.jbusres.2016.04.155

❖ Abdullah Bin Omar, Naveed Sultan, Khalid Zamban, Nazish Bibi, Abdul Wajid and
Khalid Khan (2011). Customer perception towards online banking services: Empirical
evidence from Pakistan. Journal of Internet Banking and Commerce, 16 (2), 1-17.

❖ Azouzi Dhekra (2009). The extent of adoption of electronic banking in Tunisia. Journal of
Internet Banking and Commerce, 14(3), 8-11.

❖ Casalo V. Luis, Carlos Flavian and Miguel Guinaliu (2007). The role of security, privacy,
usability and reputation in the development of online banking. Online Information Review,
31(5), 583-603.

❖ Consult, A.N. (2002). China online banking study. Available at

http://estore.chinaonline.com/chinonlbanstu.html.

❖ Flavian Carlos, Miquel Guinaliu and Eduardo Torres (2006). How bricks and mortar
attributes affect online banking adoption. International Journal of Bank marketing, 24(6),
406-423.

❖ Gerrard, P. and Cunningham, B.J. (2003). The diffusion of internet banking among
Singapore consumers. International Journal of Bank Marketing, 21(1), 16- 28.
❖ Hozlina (2011). Impacts of service quality on customer satisfaction: Study of Online
banking and ATM services in Malaysia. International Journal of Trade and Economics,
2(1), 242-258.

❖ Johnson, Michael D. Eugene W. Anderson, Claes Fornell (1995). Rational and adaptive
performance expectations in a customer satisfaction framework. Journal of Consumer
Research, 21(3), 695-707

❖ Kumbhar M. Vijay (2011). Factors affecting the customer satisfaction in ebanking:

Some evidences from Indian banks. Management Research and Practice, 3(4), 1-14.

❖ Manzano Joaquin Aldas, Carlos Lassola-Navarre, Carla Ruiz- Mafe and Silvia Sanz-
Blas (2008). Key drivers of internet banking services use. Online Information Review,
33(4), 672-695.

❖ Munhurrun, P. And Naidoo, P. (2000). The impact of internet banking service quality
on satisfaction and behavioural intention. Available at www. The ibfr.com

❖ Nupur Jannatul Mawa (2010). E-banking and customer satisfaction in Bangladesh: An

analysis. International Review of Business Research papers, 6(4), 145-156.

❖ Perumal, V. and Shanmugan (2004). Internet banking: Boone or Bane. Journal of

Internet Banking and Commerce, 19(3), 1-6.

❖ Buzzle (2010). What is the internet banking available for:

http://www.buzzle.com/articles/what-is-internet-banking.html
❖ Gallup, C. (2008). Dynamics of banking technology adoption: Internet Banking application:
University of Warwick

❖ Hom, W (2000). An Overview of Customer Satisfaction Models, RP Group Proceedings

Carlifornia Community College. 37

❖ Kang, G., and James, J., (2004). Service Quality Dimensions: an examination of Gronoos‟s
service quality model. Managing Service Quality. 14 (4) 266-277

❖ Li – Y, (2009). A Model of Customer E-loyalty in Online Banking. Economics Bulletin, 29 (2),

891-902

❖ Olivia, M. (2011). Differences between online banking and ebanking- retrieved from
http://www.differencebetween.com/difference-between-online-banking-and-vs-e banking /2011

❖ Parasuraman, A., Zeithaml V.A., and Berry, L.L. (1988). SERVQUAL; A Multiple-Item Scale for
measuring Consumer Perceptions of Service Quality. Journal of Retailing, 64, 12-40

❖ Zeithaml, V.A., Parasuraman, A. and Malhotra, A. (2002). Service Quality delivery through
websites: a critical review of extant knowledge. Journal of Academy of Marketing Science, 30
(4), 362-375

❖ Study of Indian Banks. International Journal for Business, Strategy & Management, 1(1), 1–9.
Kurila, J., Lazuras, L., & Ketikidis, P. H. (2016). Message framing and acceptance of branchless
banking technology. Electronic Commerce Research and Applications, 17, 12–18.
 Web-Sites:

❖ www.bankofindia.co.in

❖ www.rbi.org.in

❖ www.bankofengland.co.uk

❖ www.iranindiabusiness.com

❖ www.economy.com

❖ www.ssrn.com

❖ https://en.m.wikipedia.org/wiki/Bank

❖ https://en.m.wikipedia.org/wiki/Customer_satisfaction

❖ http://www.internetbanking.in/

❖ http://securityresearch.in/onlinebanking/
 ANNEXURE 1: LETTER OF INTRODUCTION

Respected madam/sir,
I'm a student of Bhopal School of Social Sciences, Bhopal pursuing a
Bachelor’s Degree in BCOM Honours. As a partial fulfillment of the Bachelors course, I am
conducting a study on the Customer Satisfaction Towards Online Banking, a case study of
people living in Shakti Nagar, Bhopal.

Please take a few moments to answer the attached questionnaire. I would be obliged if you
cooperate with me in filling the questionnaire. Your contributions and answers will be treated
with utmost confidentiality. The questionnaire is being used for academic purpose.

Your assistance and cooperation will be highly appreciated.

Yours Sincerely,

ADARSH BILGAIYAN
 ANNEXURE 2: QUESTIONNAIRE

A STUDY ONCUSTOMER SATISFACTION TOWARDS ONLINE

BANKING

Please fill thefollowinginformation: Date

Name

Age

Gender: Male Female Qualification

Respected madam/sir,

As a part of my project I would like to gather some

information from you which will help me in an in-depth study of project. I would be
obliged if you cooperate with me in filling the questionnaire. The questionnaire is
being used for academic purpose.

ADARSH BILGAIYAN
 Kindly fill the following:

(Please put a tick mark in the appropriate box)

1. Do you think E-banking services are necessary in present scenario?

Yes

No

2. How long have you been using internet banking?

Less than 1 month

1 to 6 months

More than 1 year

3. Which factor promotes you to use the new techniques in E-Banking?

Reduced transaction time

Cost effectiveness

Ease of use

All the above

4. How frequently do you use Mobile banking services per month (for example --
balance inquiry, fund transfer between account?

Never

1 to 5 times

5 to 10 times

More than 10 times

5. How frequently do you visit Bank per month?
Never

1 to 5 times

5 to 10 times

More than 10 times

6. What type of issue you are facing while using E-Banking services?

Internet Connectivity

unauthorized access within the network & loss or damage of data by hackers

Data privacy & confidentiality

Lack of knowledge on the usage of E-Channels

7. Are you satisfied with E-Banking services you are receiving?

Yes

No

8. Give rating to E-Banking services you are receiving?

Excellent

Very Good

Good

Average