PEOPLE WITH E-BANKING AGAINST BRANCH BANKING (A Case Study of Coastal Districts in Andhra Pradesh) By DR D. VISHNU MURTY Principal Investigator DR K.VENUGOPAL Co-Investigator
INTRODUCTION Daniel(1999) defined Electronic-Banking as the delivery of banks information and services by banks to customers via different delivery platforms that can be used with different terminal devices such as PC and a Mobile phone with Browser or Desktop Software, or Digital TV.
E- Banking (Internet Banking) is the automated delivery of banking products & services directly to the customers through electronic, interactive communication channels. It includes the systems that enable financial institution, customers, individuals & businesses to access accounts, transact business or obtain information on financial products & services through a network including the Internet. Services covered under E-banking includes Automated Teller Machines Credit Cards Debit Cards Smart Cards Electronic Fund Transfer (EFT) System Mobile Banking Cheque Truncation Payment system
The Banking Sector in India has undergone tremendous changes during the past two decades mainly due to the forces like Economic Liberalisation Globalization Revolution In Information Technology Changing Customer Requirements ADVANTAGES OF E-Banking The operating cost per unit services is lower for the banks It offers convenience to the customers as they are not go to the banks premises. The customers can obtain funds at any time from ATM. The customer can easily transfer the funds from one place to another place electronically. SOME FACTS FOR FINANCIAL INCLUSION, ALMOST 60% OF THE POPULATION DOES NOT HAVE BANK ACCOUNT. TAKE BANKING TO THE MASSES- ONLY 90000 BANK BRANCHES IN INDIA COVERING THE WHOLE POPULATION. ACCORDING TO CITI BANK THE BANK BRANCH IS 10 TIMES MORE EXPENSIVE THAN DOING TRANSACTION ON MOBILE PHONE.
NEED FOR THE STUDY Growth Indicators FY 12 FY 13 Growth % Total IT Expenses Incurred (By All Banks)(Rs.Cr) 14,712 15,659 6.4 Total No-Frill Accounts opened (mn) 68.99 97.53 41 Mobile Banking user base (mn) 39.10 54.98 41 Average daily No. of Mobile Fund Transfers 68,167 154043 125 Average daily Value of Mobile FundTransfer(Rs.Cr) 3.69 25.58 593 Avg.daily value of paper based Fund Transfer (Rs.Cr)
78,997 102,137 Dbt cards23 Cdt cards14 Avg.daily Value of Electronic Fund Transfer ( Rs.Cr) SOURCE: IDRBT&ERNST YG REPORT 2013 112,066 144,720 59 Rank Bank Name 1 State Bank of India(SBI) 2 Industrial Credit & Investment Corporation of India(ICICI) 3 Axis Bank 4 HDFC 5 Bank of India 6 Punjab National bank 7 Bank of Baroda 8 Canara Bank 9 Union Bank of India 10 Citi Bank Top 10 Banks providing Best Internet Banking facilities in India (http://omgtoptens.com) It is evident from the above facts and figures that the Adoption of TECHNOLOGY In Banking is beneficial for most of the banks and customers too with a considerable improvement in customer service quality to urban population. The same benefits and services would be extended to unbanked areas especially to semi-urban and rural population where there is a high potentiality. But Technology accustomization is very low among Rural population. The reasons behind are yet to be investigated therefore there is a Need for the study to integrate Technology, people,Policy and processes and also to deliver superior customer service to Rural population in India . RESEARCH GAP Introduction and development of E-Banking began in 1990s (Pikkarainen et al.2004,p.224). A research made in U.S in year 1999 stated that there began huge increase in the use of e-banking in America. Author Contribution Sathye (1997) The study in Australia found that only two of the 52 banks started internet banking services. He interpreted that education would be a crucial factor for expanding internet banking in Australia. If customers are convinced about the various advantages of internet banking they will start asking for this service from their banks, and will put pressure on the banks to go ahead with internet banking. Filotto et al. (1997) Illustrated that the adoption rates of ATM were higher among young users. Barnett (1998) Findings proved that younger consumers are more comfortable in using e-banking. Mookerji (1998) Explored that internet banking is fast becoming popular in India. Nevertheless, it is still in its evolutionary stage. They expect that a large sophisticated and highly competitive internet banking market will develop in future. Joseph et al. (1999) Examined the influence of internet on the delivery of banking services. They found six primary dimensions of e-banking service quality such as convenience and accuracy, feedback and complaint management, efficiency, queue management, accessibility and customization. Mols (1999) Acknowledged that the internet banking is an innovative distribution channel that offers less waiting time and a higher spatial convenience than traditional branch banking with significantly lower cost structure than traditional delivery channels. Internet banking reduces not only operational cost to the bank but also leads to higher levels of customer satisfaction and retention. As a result internet banking is very attractive to banks and consumers, who now have higher acceptance to new technology. Jeevan (2000) Observed that the internet banking enables banks to offer low cost and high value added financial services. US web-corporation argues that finally banks are finding that a comprehensive online banking strategy is indispensable for success in the increasingly competitive financial services market. Changes in technology, competition and lifestyles have changed the face of banking and banks in the present environment are looking for alternative ways to provide differentiated services. Hasan (2002) Found that online home banking has came out as a significant strategy for banks to attract and retain customers. About 75 percent of the Italian banks have adopted some form of internet banking during the period 1993-2000. The study also found that the higher likelihood of adopting active internet banking activities is by larger banks, banks with higher involvement in off-balance sheet activities, past performance and higher branch network. Mishra (2005) Explained the advantages and the security concerns about internet banking. According to him, improved customer access, offering of more services, increased customer loyalty, attracting new customers are the primary drivers of internet banking. But in a survey conducted by the online banking association, member institutions rated security as the most important concern of online banking. Nyangosi et al. (2009) Collected customers' opinions regarding the importance of e- Banking and the adoption levels of different e-Banking technologies in India and Kenya. The study highlighted the trends of e-banking indicators in both countries. The overall result indicates that customers in both countries have developed a positive attitude and they give much importance to the emergence of e-banking. E-BANKING IN INDIA Author Contribution Arora (2003) Made an attempt to prove that technology had a definitive role in facilitating transactions in the banking sector; and the impact of technology had resulted into the introduction of new products and services by various banks in India. Hogarth and Hilgert (2004) highlighted that electronic banking technology represents a variety of different services, ranging from common ATM services and direct deposit to Automatic Bill Payment (ABP), Electronic Transfer of Funds (EFT) and computer banking (PC banking). Aggarwal (2003) Looked for such avenues where e-banking could play significant role in e- democracy. The author discussed two case studies on the implementation of e-banking in digital democracy. Laforet and Li (2005), The objective of the study was to identify the target customers for online and mobile banking, and to compare the attitude of users and non-users towards e-banking with respect to a number of factors such as technology, security, convenience, etc. Ashiya (2006) The author evaluated different modes of e-payment used across the globe. The main objective of the study was to find the current offerings and development provided by electronic payments. Enders et al. (2006) Addressed a fundamental problem of the disruptive innovation theory which lies in the difficulty to categorize new technologies into sustaining and disruptive innovation. Jain and Hundal (2006) Described the importance of mobile banking and barriers in the adoption of mobile banking. The paper examined the forces that can act as barriers in mobile banking service adoption. Krishnamurthy (2006) Highlighted the advantages, risks, innovations and convenience involved in e-banking. ATM, telephone, internet and cluster banking helped banks to deliver the products more effectively. The author, in his paper, also describedoperational efficiency of e- banking. Raghvan (2006) Highlighted the transformation in the banking sector due to effect of information technology, tele-communication and electronic data processing. He also attempted to visualize the perception of banks in India in the year 2020 taking into account the impact of internet banking, ATMs, EFT on the performance of banks. Reeti Agarwal et al (2009) found that people in the age group of 31-45 years using e-banking most frequently. Respondents opined that using e-banking for balance inquiry to be the most useful, closely followed by inter-account transfer of funds and they found e-banking least useful for lodging complaints. Slow transaction speed was found to be the most frequent problem faced, closely followed by non-availability of the server while using e-banking. Srinivas (2009) discussed various e-banking channels and suggested security tips for customers which include changing password frequently, abstaining from revealing PIN either via mails or phone, avoiding cyber cafes for net banking etc. Kamakodi et al (2008) Found that a wide gap exists in human service in Indian banking while technology based services are exceeding expectations. Uppal and Chawla (2009) Found that the customers of public sector, private sector and foreign banks in Ludhiana district of Punjab are interested in e-banking services, but at the same time are facing problems like inadequate knowledge, poor network, lack of infrastructure, unsuitable location, misuse of ATM cards and difficulty to open an account. Mishra (2011) Provided useful tips to ensure safety of IB transactions. IB users are advised not to reply to any mail, phone call or letter, asking for the IB information like login id or password, and not to click on any link provided in any mail, claiming to be the link for the bank's website are the important tips, among others. Mohammed and Shariq (2011) In the city of Lucknow, U.P to examine the adoption of e-banking channels, particularly ATM, it was found that ATM was the most adopted technology by banks. Shukla and Shukla (2011) Stated that E-banking offers a higher level of convenience for managing one's finances even from one's bedroom. However, it continues to present challenges to the financial security and personal privacy. Customers are advised not to share personal information like PIN numbers, passwords etc with anyone, including employees of the bank; change ATM PIN and online login and transaction passwords on a regular basis; ensure that the logged in session is properly signed out. N. Jamaluddin (2013) More introduction of IT alone will not be sufficient to bring necessary performance improvement and get the competitive advantage but intelligent people are required to use such intelligent tools. Committee Report Dr. C. Rangarajan Committee [1983] Dr. Rangarajan committee had drawn up in 1983-84 the first blue print for computerisation and mechanisation in banking industry and looked into modalities of drawing up a phased plan for mechanisation for the banking industry covering period 1985-89. The committee in its report in 1984 recommended introduction of computerisation and mechanisation at branch, regional office / zonal office and head office levels of banks.
W.S. Saraf Committee [1994] In 1994, the Governor, Reserve bank of India had appointed a committee on technology issues under the chairmanship of W. S. Saraf. The committee looked into technological issues related to the payment system and to make recommendations for widening the use of modern technology in the banking industry. The Saraf committee recommended to set up institutions for electronic funds transfer system in India. COMMITTEE REPORTS Shere Committee (1995) In 1995, RBI formed a committee under the chairmanship of K. S. Shere, to study all aspects relating to electronic funds transfer and propose appropriate legislation. The Shere committee had recommended framing of RBI (EFT system) regulations under section 58 of the Reserve bank of India Act 1934 (RBI Act.), amendments to the RBI act and to the bankers book evidence act, 1891 as short term measures and enacting of a few new acts such as EFT act, the computer misuse and data protection act etc. as long term measures. Narasimhan Committee [1998] In order to examine the various issues related to the technology upgradation in the banking sector, the Reserve Bank of India appointed Narasimhan committee in September 1998. The committee consists of representatives from the Government, Reserve Bank of India, banks and academic institutions associated with the information technology. The committee dealt with the issues on technology upgradation and observed that the most of the technology that could be considered suitable for India in some form or the other has been introduced in some diluted form or as a pilot project, but the desired success has not been achieved because of the reasons inter-alia lack of clarity and certainty on legal issues.
The review of the above literature it is suggested that most of the studies have been done on issues related to E-Banking in other countries and a little work done in India. The above empirical, theoretical studies and committee reports have been undertaken to analyse the impact of E-banking focused mainly on productivity, profitability and services provided to the customers for urban population only.
Much work has not been done in India with regard to the E-Banking for rural and semi-urban population. Moreover, no work is started on Technology accustomization in general and Andhra Pradesh in particular therefore research gap is much between urban and rural population. therefore the present study proposed to study various issues on E-banking for semi-urban and rural population in India and Andhra Pradesh.
1. To study the behavioral changes and level of awareness of Rural people with reference to the usage of technology in their daily walk of life. 2. To study and examine the approaches of Branch Banking towards the delivery of the services to Rural population. 3. To Investigate the process and factors which are affecting the Technology accustomization among rural customers in Andhra Pradesh. 4. To investigate the process of institutionalization of E-Banking services. 5. To analyze and compare the service differences between E-Banking and Branch Banking. 6. To suggest appropriate measures and strategies to achieve maximisation of Technology accustomisation through integrating Technology, people,policy and processes.
OBJECTIVES
RESEARCH METHODOLOGY
The Research Survey will be answered by a mix group of people i.e. Rural people, Bankers and Technocrats from Nine Coastal Districts in Andhra Pradesh.
SRIKAKULAM KRISHNA CHITTORE VIZIANAGARAM GUNTURU YSR CUDDAPA VISAKHAPATNAM PRAKASAM KARNOOL EAST GODAVARI NELLORE ANANTAPUR WEST GODAVARI
POPULATION : Bankers (Public & Private ),Rural Customers (including SHGs) ,T echnology Suppliers ,Technocrats and other Financial Institutions . SAMPLE SIZE : 1500 SAMPLING METHOD : Simple Random Sampling DATA COLLECTION : Primary Data & Secondary Data
Secondary Data :Banks annual Reports Published Articles Websites Govt.Report Personal Profiles Consultants
DATA ANALYSIS : Quantitative & Qualitative Analysis by using SPSS Descriptive Analysis by using PIE Chart,tables and Percentages etc
Schedule
Personal Contact & Discussion
Observation Primary Data Expected outcome The expected outcome from the project could be.. More Awareness of about E-Banking in Rural areas Exploration of the Rural potency of Technological accustomization at a certain period of time The chance of an extensive expansion of services if the rural people are dexterous towards E- Banking Consumption of technological devices will have a probability of increasing its sales if there is a trend amalgamated with rural habitual changes and changes in decision makings
Expected outcome Upgradtions of specific novice Technological and Infrastructural facilities in rural areas Identify the factors and strategies to achieve maximisation of Technology accustomisation through integrating Technology, people,policy and processes. It will also addresses the regulatory and supervisory concerns of E-Banking in Rural India. Research contribution to the Rural Banking & E- Banking literature.
Consultancy
Conversion of bankers as clients and serving them with the supplementation of Strategic plans in particular with the institutionalization of technology at par with group behavioral changes exclusively in rural areas of coastal Districts of Andhra Pradesh Time & Activity Chart Time As per the norms and schedule prescribed by the authorities Activity Conducting a massive survey to different categories of rural people, bankers and technocrats Methodological Applications in association with modern research models GENERATION TIME & ACTIVITY CHART DATA COLLECTION FROM GROUP 1 PILOT SURVEY DATA COLLECTION FROM GROUP 2 DATA COLLECTION FROM GROUP 3 &OTHERS AND DATA ANALYSIS RESULT ANALYSIS, CONCLUSIONS, DOCUMENTATON FINANCIAL ASSISTANCE Research Personnel : Project Fellow (Non Net/Non Get/@ Rs: 14000/-p.m +16000 thirdyear)
Hiring Services : 100000 Field Work and Travel : 510000 Equipment (Laptop-DEL, Scanner ,printer &DVDs and CDs : 150000 Contigency (including special needs) : 150000 Honorium to retired teacher : 0000 Books and Journals : 62000 Total 1500000 528000 THANK YOU VERY MUCH SUGGESTIONS ARE EARNESTLY SOLICITED