A

Study
On Customer Satisfaction Level
With reference to Online Banking Services
Of Selected Public and Private Sector Banks
Of Anand District of Gujarat State

Presented by:
Dipak V. Patel

Paper presented to International Conference Titled “Contemporary Innovative Practices in

Management” on 13–14, April, 2012 at Pacific University, Udaipur, Rajasthan (India).


*Authors is Research Scholars and Faculty members at Faculty of Business Administration,
Dharmsinh Desai University, Nadiad–387 001, Kheda District, Gujarat State, India.
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 ABSTRACT
A
Study
On Customer Satisfaction Level
With reference to Online Banking Services
Of Selected Public and Private Sector Banks
Of Anand District of Gujarat State
Due to the fast developing knowledge economy associated to technology, services and
globalization, innovation is at present gaining high priority in businesses and research
institutions. Indian banking sector is also undergoing a sea changes witnessing redesigning
and makeover. The definition of banking service is drastically changed. Under such situation
the survival, sustainability and success of any bank are largely depends on its capability to
innovate and attract more number of customers. The present paper focuses on E–Banking
which is beneficial to customer as well as the Banks. Many service products are provided like
M–banking, SMS banking, Tele banking, Internet banking, ATMs etc. The main advantage is
convenience, transaction speed, efficiency etc. E–Banking is used because it ease the bill
payments, rail and air reservations, shopping, fund transfer, investments etc. The paper
concentrates on a study On Customer Satisfaction Level With reference to Online Banking
Services of Selected Public and Private Sector Banks of Anand District of Gujarat State the
findings are based on primary data collected through questionnaire. It attempts to measure
and compare the customer satisfaction level of the banks.
Key words: Innovation, E–banking, Customer Satisfaction

INDEX

1. Introduction
2. Objectives
3. Research Methodology
4. Profile Banking Industry In India
5. Data Analysis & Findings
6. Limitation of Study
7. Appendix – Questionnaire

INTRODUCTION

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In a free market economy only those will survive who provide best to the customers. India is
a mixed economy in which there is existence of both private as well as public sector units
provides products and services to the target market. Before 1990 there was monopoly of
public sector units in providing products and services to the customers but after the
liberalized steps taken by the central government in 1991 the economic scenario has changed
and now a days each and every business entity whether it is from private sector or public
sector provide value for money to the customers. In this paper we have concentrated on a
study On Customer Satisfaction Level With reference to Online Banking Services of Selected
Public and Private Sector Banks of Anand District of Gujarat State in which we have selected
HDFC and ICICI banks from private sector and SBI and BOB from public sector.
As time passes customers of banking industry become techno savvy and as a result now a
days bank are offering technology oriented new and better services and customers are
accepting it immediately like m-banking, SMS banking Tele banking etc.
We have selected Anand, Vallabh Vidhya Nagar, Borsad and Petlad city for our study purpose
with a sample size of 200 respondents to draw the conclusion pertaining to customer
satisfaction level of customers of private and public sector banks.
OBJECTIVES OF STUDY
The broad objective of this study is to get an idea about customer satisfaction level with
reference to Online Banking Services provided by banks of public and private sector in
selected cities of Anand district.

RESEARCH METHODOLOGY
DATA COLLECTION
(A) Data Collection sources
1 Primary Data Source: Primary data will be collected from respondents through
survey.
2 Secondary Data Source: Secondary data will be collected from Newspaper &
Magazine and internet.
(B) Data Collection Method
1 Primary Data Method : Personal interview using structured questionnaire
2 Secondary Data Method : manuals & newspaper and e-resources
SAMPLING DESIGN
1 Population: Account holders of selected banks in Anand, Vallabh Vidhya
Nagar, Borsad and Petlad city of Anand district of Gujarat state.
2 Sampling Frame: current users in
3 Sampling Unit: Customers /Account Holders of selected Banks in Anand,
Vallabh Vidhya Nagar, Borsad and Petlad city of Anand district of Gujarat state.

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4 Sampling Method: Simple Random Sampling Method
5 Sampling Size: 200 respondents .
6 Research Design: Exploratory
7 Research Approach: Survey
8 Research Instrument: Questionnaire

PROFILE BANKING INDUSTRY IN INDIA

Indian Banking Sector: Brief Introduction
The Rs 64 trillion (US$ 1.22 trillion) Indian banking industry has made exceptional progress
in last few years, even during the times when the rest of the world was struggling with
financial meltdown. Even today, financial institutions across the world are facing the
repercussions of the turmoil but the Indian ones are standing stiff under the regulator's
watchful eye and hence, have emerged stronger.
Ratings agency Moody's believe that strong deposit base of Indian lenders and Government's
persistent support to public sector and private banks would act as positive factors for the
entire system amidst the negative global scenario.
The sector has undergone significant developments and investments in the recent past. Some
of them are discussed hereafter along with the key statistics and Government initiatives
pertaining to the same.
Evolution of the Indian Banking Industry:
The Indian banking industry has its foundations in the 18th century, and has had a varied
evolutionary experience since then. The initial banks in India were primarily traders’ banks
engaged only in financing activities. Banking industry in the pre-independence era developed
with the Presidency Banks, which were transformed into the Imperial Bank of India and
subsequently into the State Bank of India. The initial days of the industry saw a majority
private ownership and a highly volatile work environment. Major strides towards public
ownership and accountability were made with nationalization in 1969 and 1980 which
transformed the face of banking in India. The industry in recent times has recognized the
importance of private and foreign players in a competitive scenario and has moved towards
greater liberalization.

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 i

Indian Banking Sector: Key Statistics

 According to the Reserve Bank of India (RBI)'s Quarterly Statistics on Deposits and
Credit of Scheduled Commercial Banks', March 2011, Nationalized Banks, as a
group, accounted for 53.0 per cent of the aggregate deposits, while State Bank of India (SBI)
and its associates accounted for 21.6 per cent. The share of new private sector banks,
Old private sector banks, foreign banks and Regional Rural banks in aggregate deposits
was 13.4 per cent, 4.6 per cent, 4.4 per cent and 3 per cent respectively.
 With respect to gross bank credit also, nationalized banks hold the highest share of
52.8 per cent in the total bank credit, with SBI and its associates at 22.1 per cent and New
Private sector banks at 13.2 per cent. Foreign banks, Old private sector banks and

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 Regional Rural banks held relatively lower shares in the total bank credit with 4.9 per
cent, 4.6 per cent and 2.4 per cent respectively.
Another statement from RBI has revealed that bank advances grew 17.08 per cent
annually as on December 16 while bank deposits rose 18.03 per cent.
RBI data shows that India raised US$ 1.6 billion through external commercial
borrowings (ECBs) in November 2011 for new projects, capital outlay et al. 78
companies raised US$ 1.3 billion under automatic route and US$ 253 million was raised
under the approval route (it requires case-by-case approval by the regulator).
 India's foreign exchange reserves stood at US$ 297 billion as on December 30, 2011.
 In recent years, deposits under non-resident Indians (NRI) schemes have witnessed an
upsurge. There was an inflow Rs 14,763 crore (US$ 2.83 billion) under NRI deposits
in 2010-11, which was 6.5 per cent higher from 2009-10. In 2011, the total of NRI
deposits was Rs 2,30,812 crore (US$ 44.2 billion), compared to Rs 2,27,078 crore (US$ 43.5
billion) in 2010.
Indian Banking Sector: Recent Developments
 The US Export-Import Bank, with a commitment of US$ 7 billion, is on a way to
diversify its portfolio in India by financing projects in education, healthcare and
agriculture. After Mexico, India is the second biggest investment destination for the
bank as the entity anticipates the country to become the largest market in next 12-18
months.
 India Infrastructure Finance Company Ltd (IIFCL) and IDBI Bank have inked a five-
year memorandum of understanding (MOU) to launch infrastructure debt fund (IDF)
schemes. The IDF, for which IDBI Bank and IIFCL would play strategic investors, is
expected to get launched by the end of February 2012.
 With 'green power' projects getting highly popular in India, especially in the states of
Gujarat and Rajasthan, banks are increasingly opening up to projects from non-
conventional (solar and wind) energy space. After receiving project proposals that
were meant for a particular industry/consumer or group of industries/consumers for their
own use, banks are now getting projects that entail commercial viability (25-100 mega
watts).
 With an intension to strengthen its hold in Southern India, the Uco Bank is planning
to add 11 more branches in Andhra Pradesh to its 66-branch-strong network in the state.
The bank has made exemplary progress in recent past with 2,004 branches in the
country and four abroad.

Government Initiatives

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Agreeing to Khandelwal Committee's recommendation, the Government has said that state-
run banks will get two Chief Executives and the large banks would get three Executive
Directors (EDs) in their management panel. Banks with a business of more than Rs 300,000
crore (US$ 57.44 billion) are considered to be large entities. The third ED, however, would be
responsible for human resource development (HRD) and technology in the bank.
"Non-resident Indians (NRIs) are crucial investors for banks as they form 10 per cent of total
personal segment deposits," said Samir Kumar Bhattacharya, General Manager (NRI), State
Bank of India (SBI). In order to encourage them, the RBI had deregulated interest rates on
Non-Resident (External) Rupee Deposits and Ordinary Non-Resident Accounts (on
December 16, 2011) due to which banks are able to offer competitive rates to NRIs. This
move has further made India an attractive investment destination for them.
Further, the Government of India has decided to infuse Rs 6,000 crore (US$ 1.15 billion) in
public sector banks during the remaining 2011-12 to ensure that the entities meet regulatory
requirements. In 2010-11, the Government had provided Rs 20,157 crore (US$ 3.86 billion)
as its capital support to public sector banks.
In order to prepare public sector banks for neck-to-neck competition ahead and improve their
performance in future, the Ministry of Finance has set new benchmarks for them to achieve.
The new benchmarks, that would calculate their functional and financial capability to qualify
for capital infusion, entail three performance indicators - savings and current deposit ratio,
employee-branch ratio and profit per employee.
Road Ahead
According to Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank
India's banking sector has the potential to become a Rs 200 trillion (US$ 3.83 trillion)
industry by 2020 if the country's economy grows at 8 per cent per annum over a long term as
the growth of any country's banking sector depends on the growth of that country's gross
domestic product (GDP).
Another report by The Boston Consulting Group (BCG) India, in association with a leading
industry organization and Indian Banks Associations (IBA) predicts that Indian banking
sector would become the world's third largest in asset size by 2025. The report also analyses
that mobile banking would become the second largest channel of banking after ATMs. Given
the positive eco-system of the industry, regulatory and Government initiatives, mobile
banking is anticipated to enhance from 0.1 per cent of transactions in a 45 per cent financial
inclusion base in 2010 to 34 per cent of the transactions with 80 per cent rural inclusion base
by 2020, as per the report.ii

Technology in Banking

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Information technology is one of the most important facilitators for the transformation of the
Indian banking industry in terms of its transactions processing as well as for various other
internal systems and processes. The various technological platforms used by banks for the
conduct of their day to day operations, their manner of reporting and the way in which
interbank transactions and clearing is affected has evolved substantially over the years.
The technological evolution of the Indian banking industry has been largely directed by the
various committees set up by the RBI and the government of India to review the
implementation of technological change. No major breakthrough in technology
implementation was achieved by the industry till the early 80s, though some working groups
and committees made stray references to the need for mechanization of some banking
processes. This was largely due to the stiff resistance by the very strong bank employees
unions. The early 1980s were instrumental in the introduction of mechanization and
computerization in Indian banks. This was the period when banks as well as the RBI went
very slow on mechanization, carefully avoiding the use of ‘computers’ to avoid resistance
from employee unions. However, this was the critical period acting as the icebreaker, which
led to the slow and steady move towards large scale technology adoption.
Computerization
The process of computerization marked the beginning of all technological initiatives in the
banking industry. Computerization of bank branches had started with installation of simple
computers to automate the functioning of branches, especially at high traffic branches.
Thereafter, Total Branch Automation was in use, which did not involve bank level branch
networking, and did not mean much to the customer.
Computerization in PSBs (%)

Networking of branches are now undertaken to ensure better customer service. Core Banking
Solutions (CBS) is the networking of the branches of a bank, so as to enable the customers to
operate their accounts from any bank branch, regardless of which branch he opened the
account with. The networking of branches under CBS enables centralized data management
and aids in the implementation of internet and mobile banking. Besides, CBS helps in
bringing the complete operations of banks under a single technological platform.

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CBS implementation in the Indian banking industry is still underway. The vast geographical
spread of the branches in the country is the primary reason for the inability of banks to attain
complete CBS implementation.
Satellite Banking
Satellite banking is also an upcoming technological innovation in the Indian banking
industry, which is expected to help in solving the problem of weak terrestrial communication
links in many parts of the country. The use of satellites for establishing connectivity between
branches will help banks to reach rural and hilly areas in a better way, and offer better
facilities, particularly in relation to electronic funds transfers. However, this involves very
high costs to the banks. Hence, under the proposal made by RBI, it would be bearing a part of
the leased rentals for satellite connectivity, if the banks use it for connecting the north eastern
states and the under banked districts.
Development of Distribution Channels
The major and upcoming channels of distribution in the banking industry, besides branches
are ATMs, internet banking, mobile and telephone banking and card based delivery systems.
Automatic Teller Machines
ATMs were introduced to the Indian banking industry in the early 1990s initiated by foreign
banks. Most foreign banks and some private sector players suffered from a serious handicap
at that time- lack of a strong branch network. ATM technology was used as a means to
partially overcome this handicap by reaching out to the customers at a lower initial and
transaction costs and offering hassle free services. Since then, innovations in ATM
technology have come a long way and customer receptiveness has also increased manifold.
Public sector banks have also now entered the race for expansion of ATM networks.
Development of ATM networks is not only leveraged for lowering the transaction costs, but
also as an effective marketing channel resource.
Growth of ATM Network in the Country

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Introduction of Biometrics
Banks across the country have started the process of setting up ATMs enabled with biometric
technology to tap the potential of rural markets. A large proportion of the population in such
centers does not adopt technology as fast as the urban centers due to the large scale illiteracy.
Development of biometric technology has made the use of self service channels like ATMs
viable with respect to the illiterate population. Though expensive to install, the scope of
biometrics is expanding rapidly. It provides for better security system, by linking credentials
verification to recognition of the face, fingerprints, eyes or voice. Some large banks of the
country have taken their first steps towards large scale introduction of biometric ATMs,
especially for rural banking. At the industry level, however, this technology is yet to be
adopted; the high costs involved largely accounting for the delay in adoption.
Multilingual ATMs
Installation of multilingual ATMs has also entered pilot implementation stage for many large
banks in the country. This technological innovation is also aimed at the rural banking
business believed to have large untapped potential. The language diversity of India has
proved to be a major impediment to the active adoption of new technology, restrained by the
lack of knowledge of English.
Multifunctional ATMs
Multifunctional ATMs are yet to be introduced by most banks in India, but have already been
recognized as a very effective means to access other banking services. Multifunctional ATMs
are equipped to perform other functions, besides dispensing cash and providing account
information. Mobile recharges, ticketing, bill payment, and advertising are relatively new
areas that are being explored via multifunctional ATMs, which have the potential to become
revenue generators for the banks by effecting sales, besides acting as delivery channels. Most
of the service additions to the ATM route require specific approval from the regulator.
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ATM Network Switches
ATM switches are used to connect the ATMs to the accounting platforms of the respective
banks. In order to connect the ATM networks of different banks, apex level switches are
required that connect the various switches of individual banks. Through this technology, ATM
cards of one bank can be used at the ATMs of other banks, facilitating better customer
convenience. Under the current mechanism, banks owning the ATM charge a fee for allowing
the customers of some other bank to access its ATM.
Among the various ATM network switches are Cash Tree, BANCS, Cash net Miter and
National Financial Switch. Most ATM switches are also linked to Visa or MasterCard
gateways. In order to reduce the cost of operation for banks, IDRBT, which administers the
National Financial Switch, has waived the switching fee with effect from December 3, 2007.
Internet Banking
Internet banking in India began taking roots only from the early 2000s. Internet banking
services are offered in three levels. The first level is of a bank’s informational website,
wherein only queries are handled; the second level includes Simple Transactional Websites,
which enables customers to give instructions, online applications and balance enquiries.
Under Simple Transactional Websites, no fund based transactions are allowed to be
conducted. Internet banking in India has reached level three, offering Fully Transactional
Websites, which allow for fund transfers and various value added services.
Internet banking poses high operational, security and legal risks. This has restrained the
development of internet banking in India. The guidelines governing internet banking
operations in India covers a number of technological, security related and legal issues to be
addressed in relation to internet banking. According to the earlier guidelines, all internet
banking services had to be denominated in local currency, but now, even foreign exchange
services, for the permitted underlying transactions, can be offered through internet banking.
Internet banking can be offered only by banks licensed and supervised in India, having a
physical presence in India. Overseas branches of Indian banks are allowed to undertake
internet banking only after satisfying the host supervisor in addition to the home supervisor.
Phone Banking and Mobile Banking
Phone and mobile banking are a fairly recent phenomenon for the Indian banking industry.
There exist operative guidelines and restrictions on the type and quantum of transactions that
can be undertaken via this route. Phone banking channels function through an Interactive
Voice Response System (IVRS) or Tele banking executives of the banks. The transactions are
limited to balance enquiries, transaction enquiries, stop payment instructions on cheques and
funds transfers of small amounts (per transaction limit of Rs 2500, overall cap of Rs 5000 per
day per customer). According to the draft guidelines on mobile banking, only banks which

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are licensed and supervised in India and have a physical presence in India re allowed to offer
mobile banking services. Besides, only rupee based services can be offered. Mobile banking
services are to be restricted to bank account and credit card account holders which are KYC
and AMC compliant.
With the rapidly growing mobile penetration in the country, mobile banking has the potential
to become a mass banking channel, with very minimum investment required by the banks.
However, more security issues need to be addressed before banking can be conducted more
freely via this channel.
Card Based Delivery Systems
Among the card based delivery mechanisms for various banking services, are credit cards,
debit cards, smart cards etc. These have been immensely successful in India since their
launch. Penetration of these card based systems have increased manifold over the past
decade. Aided by expanding ATM networks and Point of Sale (POS) terminals, banks have
been able to increase the transition of customers towards these channels, thereby reducing
their costs too.
Payment and Settlement Systems
The innovations in technology and communication infrastructure in recent years have
impacted banks in a large way through the development of payment and settlement systems,
which are central to the major portion of the businesses of banks.
In order to strengthen the institutional framework for the payment and settlement systems in
the country, the RBI constituted, in 2005, a Board for Regulation and Supervision of Payment
and Settlement Systems (BPSS) as a Committee of its Central Board. The BPSS now lays
down policies relating to the regulation and supervision of all types of payment and
settlement systems, sets standards for existing and future systems, approves criteria for
authorization of payment and settlement systems, and determines criteria for membership to
these systems, including continuation, termination and rejection of membership. Thereafter,
the government and the RBI felt the need for a legal framework dedicated to the efficient
functioning of the payment and settlement systems. The Payment and Settlement Systems Act
was passed in December 2007, which empowered the RBI to regulate and supervise the
payment and settlement systems and provided a legal basis for multilateral netting and
settlement.
Important technological innovations in payment and settlement systems introduced by the
RBI in recent years are discussed here.
Paper Based Clearing Systems
Among the most important improvement in paper based clearing systems was the
introduction of MICR technology in the mid 1980s. Though improvements continued to be

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made in MICR enabled instruments, the major transition is expected now, with the
implementation of the Cheque Truncation System for the processing of cheques.
Cheque Clearing (Volume)

Cheque Truncation System (CTS)

Truncation is the process of stopping the movement of the physical cheque which is to be
truncated at some point en-route 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, the CTS reduce the probability of frauds,
reconciliation problems, logistics problems and the cost of collection.
The cheque truncation system was launched on a pilot basis in the National Capital Region of
New Delhi on February 1, 2008, with the participation of 10 banks. The main advantage of
the cheque truncation system is that it obviates the physical presentation of the cheque to the
clearing house. Instead, the electronic image of the cheque would be required to be sent to the
clearing house. This would provide a more cost-effective mode of settlement than manual and
MICR clearing, enabling realization of cheques on the same day. Amendments have already
been made in the NI Act to give legal recognition to the electronic image of the truncated
cheque, providing for a sound legal framework for the introduction of CTS.
Currently the effort is on increasing the processing efficiency with respect to paper based
transactions, and as far as possible, to reduce the burden on paper based clearing. Through the
introduction of advanced electronic funds transfer mechanisms, the RBI has been successful
in diverting a large portion of paper based transactions to the electronic route.
Electronic Clearing Service
The Electronic Clearing Service (ECS) introduced by the RBI in 1995, is akin to the
Automated Clearing House system that is operational in certain other countries like the US.
ECS has two variants- ECS debit clearing and ECS credit clearing service. ECS credit
clearing operates on the principle of ‘single debit multiple credits’ and is used for transactions
like payment of salary, dividend, pension, interest etc. ECS debit clearing service operates on
Page 13 of 26
the principle of ‘single credit multiple debits’ and is used by utility service providers for
collection of electricity bills, telephone bills and other charges and also by banks for
collections of principal and interest repayments. Settlement under ECS is undertaken on T+1
basis. Any ECS user can undertake the transactions by registering themselves with an
approved clearing house.
ECS Transitions (Volume)

Operating from 74 different locations, ECS handles an average of 20 million transactions per
month. It enables easy payments and collections for repetitive and bulk transactions. ECS
takes off a lot of burden of paper work from the banks, enabling smooth flow of transactions.
The volume of electronic transactions has increased at an annual average growth rate of
32.1% during FY05-FY09. The use of ECS (credit) and ECS (debit), in particular, has
witnessed substantial growth in the last few years.
The RBI has recently launched the National Electronic Clearing Service (NECS), in
September 2008, which is an improvement over the ECS currently operational. Under NECS,
all transactions shall be processed at a centralized location called the National Clearing Cell,
located in Mumbai, as against the ECS, where processing is currently done at 74 different
locations. ECS system has a decentralized functioning, and requires users to prepare separate
set of ECS data centre-wise. Users are required to tie-up with local sponsor banks for
presenting ECS file to each ECS Centre. As on September 2008, 25000 branches of 50 banks
participate in the NECS. Leveraging on the core banking system, NECS is expected to bring
more efficiency into the system.
Electronic Funds Transfer Systems
The launch of the electronic funds transfer mechanisms began with the Electronic Funds
Transfer (EFT) System. The EFT System was operationalized in 1995 covering 15 centers
where the Reserve Bank managed the clearing houses.
Special EFT (SEFT) scheme, a variant of the EFT system, was introduced with effect from
April 1, 2003, in order to increase the coverage of the scheme and to provide for quicker
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funds transfers. SEFT was made available across branches of banks that were computerized
and connected via a network enabling transfer of electronic messages to the receiving branch
in a straight through manner (STP processing). In the case of EFT, all branches of banks in
the 15 locations were part of the scheme, whether they are networked or not.
A new variant of the EFT called the National EFT (NEFT) was decided to implemented
(November 2005) so as to broad base the facilities of EFT. This was a nation wide retail
electronic funds transfer mechanism between the networked branches of banks. NEFT
provided for integration with the Structured Financial Messaging Solution (SFMS) of the
Indian Financial Network (INFINET). The NEFT uses SFMS for EFT message creation and
transmission from the branch to the bank’s gateway and to the NEFT Centre, thereby
considerably enhancing the security in the transfer of funds. While RTGS is a real time gross
settlement funds transfer product, NEFT is a deferred net settlement funds transfer product.
As the NEFT system stabilized over time, the number of settlements in NEFT was increased
from the initial two to six. NEFT now provides six settlement cycles a day and enables funds
transfer to the beneficiaries account on T+0 basis, bringing it closer to real time settlement.
The commencement of NEFT led to discontinuation of SEFT, and EFT is now available only
for government payments. With the SFMS facility, branches can participate in both the RTGS
and the NEFT System. It is envisioned that all the RTGS enabled bank branches would be
NEFT-enabled too, so that the customer would have a choice between RTGS or NEFT, based
on time urgency, value of the transaction and different charges applicable on the two systems.
Using the NEFT infrastructure, a one-way remittance facility from India to Nepal has also
been implemented by the RBI since 15th May 2008.
In order to increase the coverage of NEFT to a wider section of bank customers in semi-urban
and rural areas, an enhancement of the NEFT called the NEFT-X [National EFT (Extended)]
is also proposed for phase wise implementation. This would facilitate non-networked
branches of banks to transfer funds electronically by accessing NEFT-enabled branches for
transfer of funds. NEFT (Extended) would work on a T+1 basis and would ensure wide rural
coverage of the electronic funds transfer system.
RTGS
The other payment and settlement systems deployed were mostly aimed at small value
repetitive transactions, largely for the retail transactions. The introduction of RTGS in 2004
was instrumental in the development of infrastructure for Systemically Important Payment
Systems (SIPS).
Categories Under SIPS

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The payment system in India largely followed a deferred net settlement regime, which meant
that the net amount was settled between banks on a deferred basis. This posed significant
settlement risks. RTGS was launched by RBI, which enabled a real time settlement on a gross
basis. To ensure that RTGS system is used only for large value transactions and retail
transactions take an alternate channel of electronic funds transfer, a minimum threshold of
one lakh rupees was prescribed for customer transactions under RTGS on January 1, 2007.
RTGS minimizes systemic risks too, in addition to settlement risks, as paper based funds
settlement through the Interbank clearing are replaced by the electronic, credit transfer based
RTGS system. High systemic risks are posed by high value interbank transfers, so, it is
considered desirable that all major interbank transfers among commercial banks having
accounts with RBI be routed only through the RTGS system. The RTGS system had a
membership of 107 participants (96 banks, 8 primary dealers, the Reserve Bank and the
Deposit Insurance, Credit Guarantee Corporation and Clearing Corporation of India Ltd.) as
at end-August 2009. The reach and utilisation of the RTGS has witnessed a sustained increase
since its introduction in 2004. The bank/branch network coverage of the RTGS system
increased to 58,720 branches at more than 10,000 centers facilitating the increased usage of
this mode of funds transfer.
Progress in TRGS Transactions

iii

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DATA ANALYSIS & FINDINGS
(1) In which Bank do you have your Account?
ICICI HDFC BOB SBI
58 42 34 66

(2) While opening the Bank Account are you aware of

the Online Banking services Provided by your Bank?
ICICI HDFC BOB SBI
Yes 58 42 34 66
No 0 0 0 0

(3) Which Online Banking Services you are aware?

Online Services ICICI HDFC BOB SBI
Internet Banking 58 33 34 66
Mobile Banking 58 37 30 58

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 Phone Banking 28 18 25 46
Card 58 42 34 66

(4) Are you using Online Banking Services?

ICICI HDFC BOB SBI

Yes 58 42 34 66
No 0 0 0 0

(5) Are you feeling convenient to use Online

Banking Services?
ICICI HDFC BOB SBI
Yes 58 42 34 66
No 0 0 0 0

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 (6) Please tick in the following table with reference to use of online banking.
Every Once in a Once in a Some Every Once in a Once in a Some
day Week Month times Day Week Month times
Online H H H H
I I I I
D D D D B S B S B S B S
Services C C C C
F F F F O B O B O B O B
I I I I
C C C C B I B I B I B I
C C C C
Net 1
7 5 50 26 8 2 1 1 8 28 44 3 7 0 0
Banking 0
Mobile 1 2 1 1
24 24 3 5 2 2 25 27 7 13 0 0
Banking 5 5 3 5
Phone 2 1 1 1
0 0 3 2 30 32 0 0 6 2 33 34
Banking 0 3 1 4
4 4 4 2
Debit Card 4 8 1 1 2 0 17 11 1 2 0 0
4 0 5 4
Online 1
8 30 33 6 7 2 2 0 0 27 31 19 23 0 0
Trading 2

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(7) To what extent you are satisfied with your Bank Online Service?
Dissatisfied Satisfied Dissatisfied
Online Satisfied (5)
(0) (5) (0)
Services
ICICI HDFC ICICI HDFC BOB SBI BOB SBI
Net Banking 58 39 0 3 34 66 0 0
Mobile
53 42 5 0 26 53 8 13
Banking
Phone
45 32 13 10 21 58 13 8
Banking
Debit Card 49 38 9 4 34 62 0 4
Online
40 31 18 11 25 50 9 16
Trading

Page 20 of 26
 (8) Rate your Satisfaction Level according to the Criteria using the scale of 1 to 5 (Highly
Satisfied = 5)
Highly Satis Neut Dissat Highly Highly Satis Neut Dissat Highly

Fa Satisfie fied ral isfied Dissatisf Satisfie fied ral isfied Dissatisf

ct d (5) (4) (3) (2) ied (1) d (5) (4) (3) (2) ied (1)
I I I I I
or H H H H H S S S S S
C C C C C B B B B B
D D D D D B B B B B
s I I I I I O O O O O
F F F F F I I I I I
C C C C C B B B B B
C C C C C
I I I I I
Convenience AccessibilityEasy

2 2 1 1
33 21 0 0 0 0 0 0 10 50 7 0 4 3 0 0
5 1 4 3

2 2 1 1 1
33 21 0 0 0 0 0 0 8 42 7 0 6 0 0
5 1 3 4 1

Page 21 of 26
Security 1 2 2 2 6 1
17 14 7 0 0 0 0 0 0 0 0 0 0 0
7 5 1 0 6 4
Privacy

1 2 2 2 6 1
17 14 7 0 0 0 0 0 0 0 0 0 0 0
7 5 1 0 6 4
Content

2 2 2 1 5 1 1
8 14 7 0 0 0 0 0 0 0 8 0 0
5 1 5 2 6 4 0
SavingTime Charges

3 1 1 1 2 5 1 1
8 14 0 0 0 0 0 0 0 0 0 0
3 4 7 4 0 3 4 3

50 35 8 7 0 0 0 0 0 0 27 66 0 0 7 0 0 0 0 0

Page 22 of 26
Page 23 of 26
 The following are the findings of our study
1. All respondents are aware of online banking services provided by banks.
2. All the respondents are using online services and feel convenience in using these
services.
3. Compare to private sector banks, customers of public sector banks are more satisfied
with the online services provided by banks and private sector banks charges more for
enjoying it.
4. Frequency of using net banking services are found more in ICICI bank, in mobile
banking and phone banking SBI bank stands first and in Debit card BOB stands first
and in online banking HDFC & SBI bank stands first. Frequency of using online services
public sector banks is better as compare to private banks.
5. Respondents of SBI banks are more satisfied with all online services except Mobile
banking, in mobile banking; customers of ICICI bank are more satisfied.
6. According to satisfaction factors like easy availability, convenience and time saving,
customers of SBI banks are highly satisfied as compared to all other banks.
7. According to security, privacy, content and charges the customers of SBI bank are
satisfied.
8. In security base ICICI bank customers are highly satisfied compared to other banks
but more customers are satisfied with SBI Banks.

LIMITATION OF THE REPORT

We have contacted 200 respondents and tried to obtain conclusion which may not be true all
time. The collection of primary data is comparatively very difficult and some time the
question of non–responses arises because respondents may not like to disclose the
information.
We have tried out level best to collect the information and arrived at conclusion.

Page 24 of 26
i

ii

iii

Questionnaire
Dear Respondent,
We are conducting a research study on a study On Customer Satisfaction Level With reference to
Online Banking Services of Selected Public and Private Sector Banks of Anand District of Gujarat
State we will appreciate your cooperation in this regard by filling up the questionnaire carefully. We
assure you that the information provided by you will be kept confidential and will be used for
academic purpose only. Please put the tick (√).

1. In which Bank do you have your account?

ICICI ( ) HDFC ( ) BOB ( ) SBI ( )
2. While opening the Bank account are you aware of the online banking services provided by
your bank?
Yes ( ) No( )
3. Which online banking services you are aware?
 Internet Banking
 Mobile banking
 Phone banking
 card
4. Are you using online banking services?
Yes ( ) No ( )
5. Are you feeling convenient to use your online banking services?
Yes ( ) No ( )
6. Please tick in the following table with reference to use of online banking.
Online servicesEverydayOnce in a weekOnce in a monthsometimesNet bankingMobile
bankingPhone banking Debit cardOnline trading
7. To what extent you are satisfied with online bank services provided by banks?
8. Online servicesSatisfiedDissatisfiedNet bankingMobile bankingPhone banking Debit
cardOnline tradingRate your satisfaction level according to the criteria using the scale of 1 to 5
(highly satisfied =5)
FactorsHighly
SatisfiedSatisfiedNeutralDissatisfiedHighly
DissatisfiedEasy AccessibilityConvenienceSecurityPrivacyContentChargesTime saving
References
http://www.dnb.co.in/bfsisectorinindia/BankC2.asp
http://www.ibef.org/industry/banking.aspx
http://www.dnb.co.in/bfsisectorinindia/BankC6.asp
www.icicibank.com/
www.hdfcbank.com/
www.bankofbaroda.com/
www.statebankofindia.com/
www.rbi.org.in/
www.scribd.com/
www.emeraldinsight.com/
www.connectjournals.com/ijcbm
www.sagepub.in/
en.wikipedia.org/wiki/Banking_in_India
www.researchandmarkets.com/reports/4020/indian_banking_industry
en.wikipedia.org/wiki/History_of_banking
www.gomamu.com/subjects/finance/text/banking_in_india.html
www.iba.org.in/events/FICCI-Sep10.pdf