Research Paper

EPRA International Journal of Economic and Business Review-Peer Reviewed Journal

Volume - 10, Issue - 9, September 2022 | e-ISSN: 2347 - 9671| p- ISSN: 2349 – 0187

SJIF Impact Factor: 8.302 || ISI Value: 1.433 || Journal DOI URL: https://doi.org/10.36713/epra2012

A COMPARATIVE ANALYSIS BETWEEN PUBLIC AND

PRIVATE SECTOR BANKS CONCERNING E-BANKING
SERVICES IN THE BALASORE DISTRICT OF ODISHA

Aumkar Prasad
Ph.D. Research Scholar, Department of Business Administration, Berhampur University

ABSTRACT DOI No: 10.36713/epra11166 Article DOI: https://doi.org/10.36713/epra11166

Banks play a very important role in the Indian financial market as they are the biggest purveyors of credit and attract
most of the savings from the population. Banking is necessary for the economic development of all the nations of the
world because a developed banking system holds the key as well as serves as a barometer for the economic health of a
country. In the Indian context, there were two phases of nationalization, the introduction of RRBs, and the entry of
private sector banks and foreign banks, and now e-banking is some important and major changes that affect the structure
as well as the functioning of the banks over time to time. Based on the Reserve Bank of India Act, 1934, Indian banks are
of two categories under two terms, one is the “Schedule Commercial Bank” and the “Non-schedule Commercial Bank”.
The banks selected for this study are State Bank of India, representing public sector banks, and HDFC Bank,
representing the private sector; as they are the largest banks in their sector, considering their number of branches,
customer base, and net worth. The objective of the study is to find consumer satisfaction in respect of e-banking and the
perception of employees for using e-banking in Public and Private sector banks in the Balasore district of Odisha. It is
found that banks are heavily dependent on message alerts to promote their e-banking products and services; it is felt that
they should supplement this with other modes like print media, hoardings, email, etc. to stimulate e-banking usage and
create greater awareness.

1. INTRODUCTION and there is a large customer acceptance rate which

Indian banking is the lifeline of a nation and means delivery of banking services to
its people. Banking has helped in developing customers using electronic technology either at their
vital sectors of the economy and to usher in a new office or at home. E-banking offers huge
dawn of progress on the Indian horizon. The opportunities in every sphere of business as the
the sector has translated the hopes and aspirations of competitive advantage, member/client retention,
millions of people into reality. Today, Indian banks increased revenues, and reduced costs.
can confidently compete with modern banks of the Understanding clients, organizational elasticity,
world. Bank branches alone are no longer enough to availability of resources, system security, reputable
offer services to meet the need of today’s high- brand name, multiple integrated channels, e-channel
demanding customers. specific marketing, support from top management,
and good client services are the vital factors for the
E-Banking success of e-banking. According to (Sahoo & Pati,
Electronic or online banking is the latest 2020) it has been found that very few customers are
delivery channel to be presented by the retail banks there who are aware of the usage of ICT for availing

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 SJIF Impact Factor: 8.302 || DOI: 10.36713/epra2012 | Volume–10 | Issue-9 | September 2021 | e- ISSN: 2347-9671 | p- ISSN: 2349-0187

banking services. In the E-banking system, banks are change in the financial sector. This study aims at
increasing their customer base with the help of examining the impact of perceived usefulness,
multiple e-delivery channels like ATMs, perceived ease of use, consumer awareness of
Credit/Debit/Smart Cards, Internet banking, Mobile internet banking, and perceived risk on the
banking, Telebanking, EFTs, etc. E-banking is acceptance of internet banking by consumers. The
offered by many banking institutions due to pressures result of this study concludes that the majority of
from global competition hence, in case of delay in customers are accepting online banking because of
offering transactions-based services on the internet; many favorable factors. The analysis concluded that
they might lose their market share. To be successful, usefulness, ease of use of the system awareness about
banks have to offer e-banking facilities instead of online banking, and risks related to it are the main
being pushed into it by others. Customers can do perusing factors to accept online banking systems.
their banking not only when they want to do it but These factors have a strong and positive effect on
also from the convenience, comfort, confidentiality, customers to accept online banking systems.
and security of their homes by using the internet or “A study of Demographics and customers satisfaction
other networks, television, telephone/modems. in internet banking”, Kumbhar and
Vijay's (2011), This study examined the relationship
Public Sector Banks between the demographics and customers
The public sector in Indian banking reached satisfaction in internet banking. It also found the
its present position in three stages. At the first relationship between service quality and
stage, the then-existing Imperial Bank of India was customers satisfaction as well as satisfaction in
converted into the State Bank of India in internet banking service provided by the public
1955 followed by the establishment of its seven sector bank and private sector banks. The study
subsidiary banks. Secondly, the nationalization found that the overall satisfaction of employees,
of 14 main commercial banks on July 19, 1969, was businessmen, and professionals is higher in internet
completed, and thirdly, 6 more commercial banking services. Also, it was found that there is a
banks were nationalized on April 15, 1980. Bank of significant difference in the customer's perception of
India was later on merged with PNB and internet banking services provided by the public and
Global Trust Bank with that of OBC Bank. Now, private sector banks. “Internet Banking, Consumer
IDBI Ltd. is included in public sector banks in 2005 adoption, and Customer satisfaction”: Andrew
hence this sector constitutes 27 banks in all. Musllme and Mallnga Ramadhan (2011), Internet
banking is where a customer can access his or her
Private Sector Banks bank account via the internet using pc or mobile
Private Sector Banks are those Banks that are phone and web browser. Internet banking service is a
owned by private players. The private sector played a banking service that allows customers to access and
strategic role in the development of joint sector bank perform financial transactions on their bank accounts
reforms in India. In 1951, there were in all 556 from their computers with an internet connection.
private sector banks, of which 474 were non- Internet banking has advantages for banks to
scheduled and 92 were scheduled. Since then, the maintain competition, save costs, enhance mass
number of public sector banks is increasing while customization, marketing and communication
those of private sector banks are decreasing. activities and maintain and attract consumers.
Internet banking helps banks in cost saving,
2. REVIEW OF LITERATURE increasing customer base, enabling mass
“Effect of IT-based services on customer customization for e-business service, extending
satisfaction in the banking industry”: Sachin Mittal marketing and communication channel, searching for
and Rajnish Jain (2010), In this research paper, is a innovation services, and exploring and developing
literature review of the banking industry and the non-core business. “Banker’s Perspectives on E-
effect of IT-based services on customer satisfaction. Banking”, Sharma, Himani (2011), This research
The study highlights customer paper is about the banker’s perspectives on the e-
satisfaction levels among young customers in the banking activities of respondents, the impact of e-
banking industry. A survey indicates the gap banking, and promotional measures used by banks to
between customer expectations and perception promote e-banking. The survey data used in this
concerning IT-based banking services. research are collected through a questionnaire in the
Findings indicated the need to improve IT-based Northern region of India by administering to 192
services for enhancing customer satisfaction. bankers. The inquiry reveals that customers generally
“Customer Perspective on E-Business Value: Case use e-banking services to the persuasion of bankers.
Study on Internet Banking”, Safeena, The bankers are convinced that e-banking helps in
Rehmath (2010), In this research paper, has improving the relationship between bankers and
determined the consumer’s perspective on customers and that it would bring patent
Internet banking adoption. Though customer improvement in the overall performance of banks. “A
acceptance is a key driver in determining the rate of study on electronic banking and customer

2022 EPRA JEBR | EPRA International Journal of Economic and Business Review | www.eprajournals.com 2
 SJIF Impact Factor: 8.302 || DOI: 10.36713/epra2012 | Volume–10 | Issue-9 | September 2021 | e- ISSN: 2347-9671 | p- ISSN: 2349-0187

satisfaction”, Bismarck Amiya and Eric Ashley service, and complaint resolution, from
(2015), E-banking encompasses the provision of customers’ perspective.
banking services and products by banks to their
customers through electronic medium. E-banking 4. RESEARCH METHODOLOGY
covers both computer and telephone banking. For The word "research" is used to describe
many banks, the inclination to e-banking services several similar and often overlapping
improves customers to the bank. The adoption of e- activities involving a search for facts. A search is
banking is also seen as a new method of expanding concerned with information rather than knowledge or
the customer base and to also counteracting the analysis and answers can normally be found in a
aggressive effort made by the traditional banking single source. This is a comparative study on the e-
institution. E-banking allows customers to inquire banking service of both public and private sector
about information and carry out most banking banks and the banks selected for this study are State
services such as account balance inquiries, bill Bank of India, representing the Public Sector, and
payments, and inter-account transfers through the HDFC Bank, representing the Private Sector, mainly
internet. Contemporary studies on e-banking on two criteria, the first being the convenience during
acknowledge that factors that drive customer the research, mainly from the same city i.e., Haridwar
satisfaction are security design, availability, and second is the diversity of the banks and their
convenience, and reliability are the most influential prominence in their respective sectors. Problem
factors of e-banking customer satisfaction. E-banking Identification, Need, and Relevance of the Research
availability is recognized as the ability of users to It is evident from the literature reviewed, that E-
access banking information and services from the banking has emerged to be beneficial for both
web. Customers can access e-banking services only financial institutes and customers. Also, for a bank to
when the service is available. survive in this cut-throat competition, it is important
to offer the best products, with quick service, with
3. OBJECTIVES OF THE STUDY complete security features, and to be up-to-date with
i. To study public sector banks v/s private the RBI guidelines, therefore a comparison between
sector banks from the e-banking perspective. public and private sector banks was also necessary to
ii. To assess the customers’ and bank understand the market situation of e-banking better
employees’ satisfaction level with the from both customers and the bank employees’
current banking facilities. perspective. This forced the researcher to select this
iii. To find the most important factor that is as a topic of her research. This research would help
inducing people towards e-banking. both the e-banking customers and the banks, not only
iv. To understand the benefits of e-banking as selected for the study, but also the other banks. To
compared to traditional banking, in terms of the best of my knowledge and belief, no research
cost, efficiency, time, secrecy, quality of work from this angle has been undertaken by
anybody till now.

5. DATA ANALYSIS & INTERPRETATIONS

Table No.1 Demographic Profile of the Respondents of the Bank customer
S.No. Demographics Frequency Percentage
Gender
1. Male 320 76
Female 180 24
Age
Below 25 60 14
2. 26 to 35 180 26
36 to 50 200 32
51 to 60 10 28
Annual Income
Dependents 10 2
3. Below 3 lakhs 170 34
3 to 15 lakhs 230 46
Above 15 lakhs 90 18
Sources: Primary Data
Table No. 1 shows that the distribution is based on respondents is belonging to Below 25
gender, out of 76 percent of respondents category, 26 Percent of respondents are belonging to
are belonging to the male category and 24 Percent of the 26 to 35 category, 32 Percent of respondents are
respondents are belonging to the female category. belonging to the 36 to 50 category and 28 Percent of
Distribution based on Age groups of 14 Percent of respondents are belonging to the 51 to 60 category.

2022 EPRA JEBR | EPRA International Journal of Economic and Business Review | www.eprajournals.com 3
 SJIF Impact Factor: 8.302 || DOI: 10.36713/epra2012 | Volume–10 | Issue-9 | September 2021 | e- ISSN: 2347-9671 | p- ISSN: 2349-0187

Distributions based on Annual income, Out of Two belonging to the 3 to 15 lakhs category and 18
respondents are belonging to the Dependents Percent of respondents are belonging to the Above 15
category, 34 respondents are belonging to Below 3 lakhs category.
lakhs, 46 respondents are

Table No. 2 Distribution of the respondents of customers based on comparison of

e-banking with traditional banking in terms of saving time
S.No. Factors State Bank of India HDFC Bank
Responses Response in Response Responses Responses Responses
Percentage in in in
Cumulative Percentage Cumulative
Percentage Percentage
1 Poor 60 24 24 30 12 12
2 Fair 70 28 52 82 33 45
3 Good 78 31 83 106 42 87
4 Excellent 42 17 100 32 13 100
Total 250 100 100 250 100 100
Sources: Primary Data

Table No. 2 shows that the distribution based on a and Finally, 32 (13 Percent) respondents gave their
comparison of e-banking with traditional opinion as Excellent. In a comparison of e-banking
banking in terms of saving time, out of 250 (100 with traditional banking, the term of saving time in
Percent) respondents in SBI, 60(24 Percent) SBI 24 percent of respondents feel that poor services
respondents gave their opinion as Poor,70 (28 on e-banking services at the same time only 12
Percent) respondents gave their opinion as Fair, percent of respondents felt that poor e-banking
78(31 Percent) respondents gave their opinion as services provided by HDFC Bank in the study area.
Good and 42 (17 Percent) respondents gave In the case of excellence of services provided by SBI
their opinion as Excellent. Out of 250 (100 Percent) 17 percent are represented and 13 percent of
respondents in HDFC bank, 30 (12 Percent) respondents of HDFC banks are presented same
respondents gave their opinion as Poor, 82(33 views.
Percent) respondents gave their opinion as Fair, 106
(42 Percent) respondents gave their opinion as Good

Table No. 3 Distribution of the respondents of customers on the basis most significant contribution of e-
Banking
Serial No. Most significant State Bank of India and HDFC Bank
contribution Response Response Response in
in Cumulative
percentage Percentage
1 Time-saving 110 22 22
2 Efficient 90 18 40
3 Convenient 270 54 94
4 Secure 30 6 100
Source: Primary Data
Table -3: ANOVA Test
Calculated
Test df Table Value Hypothesis
Value
ANOVA 1 0.0329 5.9873 Accepted
Source: Author’s Calculation

Table No.3 shows that the basis most significant security. The response in cumulative percentage
contribution of e-banking, out of of respondents are presented only 22 in Time-saving,
500 (100 Percent), and 270 (54 Percent) respondents on the efficient cumulative percentage of
gave their acceptance of the service as 40, on convenient stage cumulative percentage of 94
convenient, 110 (22Percent) respondents gave their and 100 percent of the cumulative value of
feel in the service on time-saving, 90 (18 secure.
Percent) respondents took in the service on efficient
view, Only 30 (six percent)
respondents gave their think on the service on

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 SJIF Impact Factor: 8.302 || DOI: 10.36713/epra2012 | Volume–10 | Issue-9 | September 2021 | e- ISSN: 2347-9671 | p- ISSN: 2349-0187

6. FINDINGS comparison of the quality of e-banking service

 More people have an account with private between public and private sector banks. It is seen
banks. that banks are heavily dependent on message alerts to
 The number of problems faced by the people promote their e-banking products and services; it is
is more in public sector banks. felt that they should supplement this with other
 People want a change in the behavior of the modes like print media, hoardings, email, etc. to
staff of the public sector banks. stimulate e-banking usage and create greater
 People are more satisfied with the private awareness. There is a need for bankers to guide and
sector banks due to their better services train their customers; additionally, they can also
provided by them. resort to video presentations at bank branches. There
 The facility that was availed by most of the should be seminars/workshops/talks on the healthy
people at private sector banks was that of usage of e-banking, especially for those who are
Internet/ Phone banking by ATM/Debit ATM or computer illiterates. Given the increased
card. competition and pressures to cut expenses, banks
need to attract and retain their customers by creating,
 The majority of respondents do not want to
maintaining, and highlighting attractive features of e-
shift from their present bank. From the
banking.
above study, it is clear that private banks are
providing better services than nationalized
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SJIF Impact Factor: 8.302 || DOI: 10.36713/epra2012 | Volume–10 | Issue-9 | September 2021 | e- ISSN: 2347-9671 | p- ISSN: 2349-0187

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