A

SYNOPSIS REPORT

ELECTRONIC PAYMENT CURRENT SCENARIO

AND SCOPE FOR IMPROVEMENT

AT

AXIS BANK LIMITED

PROJECT SYNOPSIS SUBMITTED FOR

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

Submitted

By

SAMALA DEEPAK

H.T.NO: 1415-21-672-115

PENDEKANTI INSTITUTE OF MANAGEMENT

IBRAHIMBAGH,HYDERABAD.
 INTRODUCTION

An e-payment system facilitates the acceptance of electronic payment for online transactions.
Also known as a sample of Electronic Data Interchange (EDI), e-commerce payment systems
have become increasingly popular due to the widespread use of the internet-based shopping and
banking.

Over the years, credit cards have become one of the most common forms of payment for e-
commerce transactions. In North America almost 90% of online retail transactions were made
with this payment type.[1] Turban et al. goes on to explain that it would be difficult for an online
retailer to operate without supporting credit and debit cards due to their widespread use.
Increased security measures include use of the card verification number (CVN) which detects
fraud by comparing the verification number printed on the signature strip on the back of the card
with the information on file with the cardholder's issuing bank.[2] Also online merchants have to
comply with stringent rules stipulated by the credit and debit card issuers
(Visa and MasterCard)[3] this means that merchants must have security protocol and procedures
in place to ensure transactions are more secure. This can also include having a certificate from an
authorized certification authority (CA) who provides PKI (Public-Key infrastructure) for
securing credit and debit card transactions.

Despite widespread use in North America, there are still a large number of countries such as
China and India that have some problems to overcome in regard to credit card security. In the
meantime, the use of smartcards has become extremely popular. A smartcard is similar to a
credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash
which transfers from the consumers’ card to the sellers’ device. A popular smartcard initiative is
the VISA Smartcard[4]. Using the VISA smartcard you can transfer electronic cash to your card
from your bank account, and you can then use your card at various retailers and on the internet.

There are companies that enable financial transactions to take place over the internet, such
as Stripe for credit cards processing, Smart pay for direct online bank payments and PayPal for
alternative payment methods at checkout. Many of the me diaries permit consumers to establish
an account quickly, and to transfer funds into their on-line accounts from a traditional bank
account (typically via ACH transactions), and vice versa, after verification of the consumer's

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identity and authority to access such bank accounts. Also, the larger me diaries further allow
transactions to and from credit card accounts, although such

credit card transactions are usually assessed a fee (either to the recipient or the sender) to recoup
the transaction fees charged to the me diary.

The speed and simplicity with which cyber-me diary accounts can be established and used have
contributed to their widespread use, although the risk of abuse, theft and other problems—with
disgruntled users frequently accusing the me diaries themselves of wrongful behavior is
associated with them.

A feature of the banking industry across the globe has been that it is increasingly becoming
turbulent and competitive, characterized by an increasing trend towards internationalization,
mergers, takeovers and consolidation of the banking industry. Moreover, a number of non-
banking companies are entering the banking industry by offering financial products and services
(e.g., Toyota’s credit card, GM’s auto financing, etc.). This has given innumerable options to
customers in choosing banking services. As a response and aided by technological developments,
banks have attempted to build customer satisfaction through providing better products and
services and at the same time to reduce operating costs. Thus, the banking industry has been
constantly innovating and with the advent of technological developments, particularly in the area
of telecommunications and information technology, one of the latest innovations that took birth,
and quite inevitably, has been the internet

With cyber cafés and kiosks springing up in different cities access to the Net is going to be easy.
Internet banking (also referred as e banking) is the latest in this series of technological wonders
in the recent past involving use of Internet for delivery of banking products & services. Even the
Morgan Stanley Dean Witter Internet research emphasized that Web is more important for retail
financial services than for many other industries.

Internet banking is changing the banking industry and is having the major effects on banking
relationships. Banking is now no longer confined to the branches were one has to approach the
branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In
true Internet banking, any inquiry or transaction is processed online without any reference to
the branch (anywhere banking) at any time. Providing Internet banking is increasingly
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becoming a "need to have" than a "nice to have" service. The net banking, thus, now is more of
a norm rather than an exception in many developed countries due to the fact that it is the
cheapest way of providing banking services.

NEED OF THE STUDY

The usage of E- payment is all set to increase among the service class. The service class at the
moment is not using the services thoroughly due to various hurdling factors like insecurity and
fear of hidden costs etc. So, banks should come forward with measures to reduce the
apprehensions of their customers through awareness campaigns and more meaningful
advertisements to make E- payment popular among all the age and income groups. Further,
with increasing consumer demands, banks have to constantly think of innovative customized
services to remain competitive. E- Payment is an innovative tool that is fast becoming a
necessity. It is a successful strategic weapon for banks to remain profitable in a volatile and
competitive marketplace of today.

OBJECTIVES OF THE STUDY: -

The main objectives of the study are:

➢ To study the awareness level of service class people regarding E- payment.

➢ To find out the frequency and the factors that influences the adoption of E- payment
services.
➢ To measure the satisfaction level of people.
➢ To understand the problems encountered in by service class people while using E-
payment services (ATM, Phone banking, etc)

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SCOPE OF THE STUDY

Every research is conducted under some constraints and this research is not an exception.
Limitations of this study are as follows: -
1. There were several time constraints.
2. The study is limited to areas of HYDERABAD only.
3. The sample size of only 100 was taken from the large population for the purpose of
study, so there can be difference between results of sample from total population.
4. The study is related to service class people only.
5. People were reluctant to go in to details because of their busy schedules.
6. Merely asking questions and recording answers may not always elicit the actual
information sought.
7. Due to continuous change in environment, what is relevant today may be irrelevant
tomorrow.

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RESEARCH METHODOLOGY

Research is defined as human activity based on intellectual application in the investigation of

matter. The primary purpose for applied research is discovering, interpreting, and the
development of methods and systems for the advancement of human knowledge on a wide
variety of scientific matters of our world and the universe.

The term research is also used to describe an entire collection of information about a particular
subject.

Methodology is the method followed while conducting the study on a particular project. Through
this methodology a systematic study is conducted on the basis of which the basis of a report is
produced.

It is a written game plan for conducting Research. Research methodology has many dimensions.
It includes not only the research methods but also considers the logic behind the methods used in
the context of the study and explains why only a particular method or technique has been used. It
also helps to understand the assumptions underlying various techniques and by which they can
decide that certain techniques will be applicable to certain problems and other will not. Therefore
in order to solve a research problem, it is necessary to design a research methodology for the
problem as the some may differ from problem to problem.

Nature

The methodology adopted to achieve the project objective involved exploratory research &
descriptive research method. The information required for fulfilling the objective of study was
collected from various primary and secondary sources.

Type of research

This study is EXPLORATORY and DESCRIPTIVE in nature. It helps in breaking vague

problem into smaller and precise problem and emphasizes on discovering of new ideas and
insights. Exploratory research was conducted during the initial stage of the research process
which helped to refine the problem into researchable one. It has progressively narrowed the
scope of research topic.

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Research design

Research design constitutes the blue print for the collection, measurement and analysis of data.
The present study seeks to identify the extent of preferences of E- payment over traditional
banking among service class. The research design is exploratory in nature. The research has been
conducted on service class people within HYDERABAD. For the selection of the sample,
convenient sampling method was adopted and an attempt has been made to include all the age
groups and gender within the service class.

Sources of data:

Following are the methods of sources of data:

Secondary data:

• Articles on E- payment taken from journals, magazines published from time to time.

• Through internet.

Primary data:

Questionnaire was used to collect primary data from respondents. The questionnaire was
structured type and contained questions relating to different dimensions of E- payment
preferences among service class such as level of usage, factors influencing the usage of E-
payment services, benefits accruing to the users of E- payment services, problems encountered.
An attempt was also made to elicit reasons for its non-usage. The questions included in the
questionnaire were open-ended, dichotomous and offering multiple choices.

Sampling technique: The sampling technique used for judgment is CONVENIENCE AND
JUDGEMENT SAMPLING.

Sampling unit: It defines the target population that will be sampled i.e. it answers who is to be
surveyed. In this study, the sampling unit is the people of HYDERABAD.

Sampling size: It indicates the numbers of people to be surveyed. Though large samples give
more reliable results than small samples but due to constraint of time and money, the sample size
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was restricted to 100 respondents. The respondents belong to different income group and
profession.

Method of data collection: The survey method is used to collect the data. Various places of
HYDERABAD visited for the purpose of collection of data.

Research instrument:

The instrument used for gathering data was questionnaire. To get further insight in to the
research problem, interview regarding their buying practices too was made. This was done to
crosscheck the authenticity of the data provided. To supplement the primary data and to facilitate
the process of drawing inference, secondary data was collected from published sources like
magazines, journals, newspapers etc.

Tools and techniques of analysis:

The data so collected will be analyzed through the application of statistical techniques, such as
bar graphs and pie charts.

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LIMITATION OF THE STUDY:

• Customers should get themselves exposed to E-PAYMENT systems in order to gain

experience and increase trust on the existing security.

• Enhancement on every sophisticated security system should be done at least every month,
to prevent hackers from stealing both money and personal information.

• Higher priority must be given to the enhancement of encryption mechanism in order to

maintain security and privacy.

• They should constantly upgrade hardware and software whenever a new feature of
enhancing security becomes available.

• Besides, issuers should create the possibility of having face-to-face interactions to ensure
institutional and customers trust is maintained.

• Highly confidential information such as customers’ personal identity number or other

code should not be revealed to anyone other than the owner itself.

9
 CHAPTER-II
REVIEW OF LITERATURE

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4. Literature Review
The enhancement of information and communication technology has opened new fields for
development of business new models. These models have created new opportunities for the
financial sector to reduce their cost and facilitate more convenience for customers. When a new
technology is introduced in the financial sector it also results in expediency and quick
accessibility for the customers (Devlin, 1995). Technology is a major factor which is
transforming the financial sector. The development in the technology concerned with
information has increased the convenience of the investors to keep a close watch on the working
of the organizations, thereby increasing symmetric information (Norton 1992 and Mishkin and
Strahan 1999). The banking institutions that have not upgraded their technology from time to
time have lost their market share by a considerable amount to other financial institutions. With
the advancement of technology, the data could be transferred from one country to the other
within a short period of time. Thus, it is becoming vital for successful banking because the work
of the banks is more of informational in nature (Bradley and Steward, 2002). Berger (2003) in
his study has found out that there has been transformations in the functioning of banking sector
due to the development of technology based financial expertise and communication technology.
The results that new technology has created should be noticed through fundamentally varying
financial sector (Suoranta and Mattila, 2003).
There has been a considerable growth in E-payment since the 90s when the use of technology in
banks was gaining widespread growth. Subsequently, it has generated curiosity in experts,
regarding the attitude of customers towards opting for technology or refraining from it.
Generally, the literature available on Internet banking revolves around on why the people are
accepting or rejecting E-payment.
Davis (1989) was the creator of Technology Adoption Model which has been the groundwork for
many other research works on technology embracement and distribution. In his technology
acceptance model (TAM), he described that individual thinking about the convenience and the
effortlessness regarding the use of technology results in its ultimate use. Perceived usefulness or
PU states that the person’s mindset of using E-payment will increase his/ her effectiveness in the
work. Perceived Ease of Use or PEU is discernment of the user that using E-payment will be
convenient and easy (Davis, 1989). Perceived usefulness and Perceived ease of are factors that
act as a link between external factors that comprise of training and technology and decisions to

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use and adopt. Perceived usefulness is subjective of perceived ease of use; it states that a
technology that is easy to use is accepted by everyone without difficulty. Technology adoption
Model suggests that influence of perceived ease of use on intention to use is only in its initial
stages. In the long run, when the knowledge of the consumer increase its influence will not be
direct and the model will operate through perceived usefulness (Venkatesh et al., 2003).
However, Lee (2003) states that the very common and practical technology acceptance model
suffers from deficit in providing adequate guidance to researchers. In spite of having an
estimating power, it is not been able to provide orderly assistance to scientists on how they can
manipulate the mindset of people, so that they can adopt e-payment. According to Lee et al
(2003) there should be also be stress on factors that make technology ease to operate. Current
literature suffers from the drawback that it does not facilitate a deeper insight on how consumers
review that E-commerce will be helpful. In addition, vigorous and theory based study on this
factor or intervention is absent in E-payment literature. Venkatesh and Bala (2008) have added to
the technology adoption model and categorized the interventions into two elements:
Ø Pre-implementations
Ø Post-implementations

4.1. Consumer and Internet Banking

Consumer behavior as defined by Schiffman and Kanuk (2008) is the act of decision making
components that are straightly concerned with getting satisfaction of needs from goods and
services. When we talk about the consumer, then, consumer is a person who takes goods and
services and gives money in return. Thus, consumer behavior deals with the buying pattern of the
consumer. By buying pattern, Schiffman and Kanuk try to say that whether the consumer is
rational or spontaneous. Rational means thinking before buying and spontaneous is instant
decision making in the market. Schiffman and Kanuk (2008) divided consumer into two
categories:
1. Business consumer/ organizational consumer- these consumer are those who purchase goods
for running respective business.
2. Personal consumer- these consumers are those who purchase goods for their personal
consumption.

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Further, Block and Roering (1979) suggested that consumer behavior also relate to the individual
consumers act of obtaining and consuming goods and services. The decision making process of
the individual consumer is also studied under the consumer behavior theory.
Backett and others suggested three ways of understanding the behavior of the customers:
1. The kind of consumer behavior obtain is subjective by the purchasing power of the
consumer.
2. The focus on faith and building the long term connection is similar to the banks and other
financial institutions.
3. The power to retain the consumer and also increase their prosperity is very vital.
Thus, with improved behavior of the consumer, financial institutions will recognize profile of the
customers.
With the advent of E-payment there has been a tremendous increase in the competition among
financial institutions (Wang 2002). Thus it has created a crucial effect on the behavior of the
consumer. The financial institution that is providing E-payment must see and notice the
consumer behavior and whether they are admitting E-payment or not. Thus if they get a positive
response from this, then E-payment will provide a competitive edge over competitors in the
coming years.

4.2. The View on Electronic payment

The modern literature on the E-PAYMENT focuses on electronic money or value with a
replacement of the money through an electronic card commonly called as Smart, Credit or Debit
card. The most revealing view of the E-PAYMENT is that they are devices that are to be used in
the E-PAYMENT system and it is not considered as a particular function or process. For
instance, Freedman (2000) purported that there are three drivers in an E-PAYMENT system i.e.
stored value cards (Credit or Debit or Smart Cards), access drivers and electronic money
(internet transactions). E-PAYMENT is overlooked mostly as because it uses new access devices
that are not popularly known to the people. Therefore, E-PAYMENT comprise of the value or
money that is stored in the form of stored value cards (Credit or Debit or Smart Cards) and the
network money (money stored in the hard drives of the computer). Many researchers like Prinz
(1999), Santomero and Seater (1996) and Tarkka (2002) pose various models that determine
factors under which E-PAYMENT or transactions can be used as an alternative for money.

13
These models signify that the adaptation of E-PAYMENT on a wider level depends upon the
distinctiveness of the users and technologies used.
According to Berentsen (1998), the impact of the replacement of the plastic money (Credit or
Debit or Smart Cards) for money is mainly on the financial guidelines. Although the electronic
money will become popular as a substitute for the money but also the financial guidelines will
continue to work constantly as because this replacement will leave the demand for the Reserve
bank capital mainly unbroken. Goodhart (2000) converse the work of financial control when the
electronic money has replaced the money totally or moderately.
The difference between monetary control and monetary autonomy is described by Cohen (2001),
where monetary control is the capability of the Reserve bank to control monetary amassed claim
and the furnish of currency, while monetary autonomy is the capability of the Reserve bank to
manipulate cost. The preamble of electronic money replacement will not condense monetary
control, but may decrease monetary autonomy.
According to Kobrin (1997), the alternative of the money are fraction of a general process of
industrial advance and globalization that are depicting national establishment of all kinds
ineffective and outdated. Helleiner (1998) purported that coercive control will still be successful
in a planet of Electronic payment. On the other hand, Tanaka (1996) suggests the institution of a
financial power in cyberspace that will manage electronic money replacement.
Friedman (1999) point out that E-PAYMENT presents the leeway that a substitute money or
transaction structure, not under the control of the Reserve bank of India may occur. On the other
hand, King (1999) squabble that today computers and technologies make it feasible to evade the
transaction organism overall, instead using direct joint clearing and payment. According to
Woodford (2000), the Reserve bank will discover any other method to carry out its financial
policy or will continue to a transaction or payment structure of choice during stabilization of
short-term interest rates despite of what structure of currency is being used.

4.3. E-PAYMENT and the Common Banking Products

Generally, E-PAYMENT or E-payment is called as the incorporation of information technology
(IT) in the operations of bank and its related activities. On the other hand, Khan (2001) argued
that E-PAYMENT is a creation of e-payment in the sector of banking and monetary services.
The consumers can use these services for various operations like account balance enquiry,

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chequebook request, payment and transactions enquiry, payment transfer, account opening and
closing as well as other banking services.

4.4. Telephone and PC Banking

This service enables consumers to enquire about any banking related issues or services over the
telephone by dialing a specific number provided by the bank. Some of the telephone banking
services has an Interactive Voice Response (IVR), where a consumer can directly avail their
transaction facility without talking to any bank representative. These require some special
authentication like password or customer identification or any security number provided by the
bank to their consumers. This service is introduced into the banking operations because of
computer telephone technology being made available Khan (2001). The telephone banking
provide a wide range of services to their customers such as Account balance enquiry; Account
statement; inter-banks Account to Account, intra-Banks Account-to-Account Transfer; Transfer;
Download Account Transaction, complaints, etc. Thus, Telephone and PC banking services had
made the consumers to avail and enjoy banking services at in their leisure time (at doorstep).

4.5. Cheque System

A cheque is a kind of payment which is still in practice on a wide scale. It is a kind of paper
based payment method in which an account holder fill in the details of the transaction by himself
like name, amount, date and signature, where on the other hand the receiver clears the cheque or
receive the payment by depositing the cheque into his account in his bank. Automation spotlight
is to decrease the number of clearing time (days) and progress on security agreement in the way
of payment and assortment. For example, the Reserve bank of India has just board upon online
clearing and India has implied awareness and marked lane to this development (Johnson, 2005).

4.6. Card System

This is a kind of E-PAYMENT which is also called as plastic money. This system incorporates
cards made of plastic which has a magnetic ribbon on their back implanted with integrated
circuit and is used for E-PAYMENT. This is a very convenient way of carrying money instead of
carrying cash. There are various types of cards used for this payment system like Credit Cards,
Debit Cards, ATM (Automated Teller Machines) Cards and Smart Cards. The power of cards
deceit in their complexity and acceptability to store and control data, and switches numerous
15
functions on one card securely and steadily (Narain,2005). While the electronic card is gaining
popularity in India now days, the Spanish financial Institution confirmed the highest
performance and update of smartcards across the whole world (Narain, 2005).

The Smart card was bought up into the market of India for medium class personnel especially
women and children in order to reduce troubles of carrying money (Narain, 2005). It is loaded
with cash value electronically which stores information on a microchip and can be carried like a
credit card. In addition, it also contains security programs in order to protect transactions
between two card users. The payment through the card can be transferred directly to a merchant,
retailer, and shopkeeper or at other outlet to pay for goods and services, and like cash,
transaction between individual without the needs for banks of the other third parties. Moreover,
central clearing is not required in this system.

4.7. Automated Teller Machine (ATM)

As the user of hard cash is practiced majorly and is considered as the most acceptable means of
financial transaction. However, the amount of transactions in the form of cash is consistently
decreasing in modern time, especially in the era of advanced or enhanced economics (Narain,
2005). With the introduction of an E-PAYMENT method or system, the carriage of hard cash as
well as bank branches visit is being reduced rapidly.
ATM stands for Automated Teller Machine. It is a kind of cash dispenser machine which allows
a bank consumer to withdraw the cash from his account through a machine. This is the most
secure transaction system as the machine is placed in a well-groomed area as well as in banking
premises, shopping centers, fuel stations, etc. with security like cameras and guards, as well as
the customer has a special security code which he enters into the machine by himself to process
the transaction.

4.8. The Influence of Innovation on the Adoption of E-Commerce

The feature of innovations depends upon the tempo of adoption. Some innovations are accepted
by the public very easily while others take a long time to built acceptability and prove its credit
worthiness (Kotler, 2000).
If it is seen that the new innovation is better than the existing, then people will be keen in
adopting the new technology. The comparison of new and existing technology is made on
16
grounds of advantage. If new technology has more advantage than the existing one then people
will adopt new technology in place of the old (Ching and Ellis, 2004). The comparative
advantage, complication and compatibility have created an important role in the adopting
innovations in the banking sector.
Roger (1983) suggested that there are three features of innovations. They are as under:
1. Comparative Advantage
2. Compatibility
3. Complexity
4.9. Comparative Advantage
Comparative advantage can be defined as the extent to which new innovation is different from
the previous (Rogers, 1983). According to Gerrard and Cunningham (2003) it is a very crucial
factor in adopting new innovation in place of the old innovations. In the words of Kotler (2000),
when the person goes through the innovation-decision procedure they try to motivate themselves
and get the information about the technology so that the gap of uncertainty related to
comparative advantage is minimized. Possible adopter is concerned with the extent to which new
innovation is superior to the old. Comparative advantage can also be explained as the prize of the
potency which is a result of the innovation. There are many sub parts concerning to the relative
advantage like the scale of fiscal prosperity, distress reduction, economy in time and attempt
(Rogers, 1983). Many people are motivated to use e-payment, the reason for this is that because
it saves a lot of time and also they are easy to use. Those people who go to office do not get time
to go to their respective banks, thus, for them it can be very efficient and time saving. As when
they go to their banks they have to stand in big queue and wait for their turn. Thus, with the
advent of Automatic teller machines (ATMs) people can do these transactions easily. ATM also
provides the facility to deal with shares and debentures with the help of de-matt accounts. The
most basic drawback of ATM is that they easily be hacked. According to a survey, around 72
percent people uses E-payment because of its ease and 80 percent people use E-payment service
because it saves a lot of time (Fox, 2002). According to a survey conducted in Europe, people
who are using E-payment do not feel motivation towards traditional banking. They do not have
to stand in queues for their turn (Karjaluoto, et al., 2002).

4.10. Compatibility

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Compatibility can be referred as the extent to which advancement is supposed to be steady with
the present resources, familiarity and the wants of the prospective adopters. Compatibility of any
Innovation depends upon the socio-cultural principles and thinking, with formerly initiated plan
or with customer requirement for a new idea (Rogers, 1983). The term compatibility means that
the people will adopt innovation only when their needs are suited to the work and the
accountability. According to Black (2001), the previous familiarity with e-commerce has
increased the eagerness of the people to adopt internet banking. The people who have knowledge
about the internet and its functioning don’t have any problem in adopting e-payment for doing
their banking transactions. A great deal of transactions is taking place by physically being
present in the bank. Thus in these cases people do not prefer e-commerce because it does not go
well with the life style of the people. A lot of people like to have one on one communication with
the bank clerks while doing their banking transactions. One-on-one dealings with the ICICI
managers and other staff increase the worth of each transaction. In India about 89 percent of the
people give more emphases on the transactions with the bank official instead of e-payment
(Suganthi, et al, 2001). It has been found that the transactions done through internet are very
uncongenial. Thus, this may be one of the causes why there is high rate of adoption and
rejection. Gerrard and Cunningham (2003) conducted a survey in Singapore in which it was
found that compatibility was one of the crucial factors on the acceptance of e-payment. Thus, the
people who use internet very frequently seem that e-payment is well suited to their style of
living. Therefore they like to do their transactions through internet banking.
4.11. Complexity
According to Rogers (1983), complexity is the level to which a new technology is supposed to
trouble-free to use and effortless to understand. If the new technology is very intricate or
complex then the rate of adoption of that technology will be low. Complexity can also be defined
as the antonym to the ease in use concept of the Technology Acceptance Model (TAM). A
technology or an innovation is only accepted only when it is not intricate and is painless to use.
From the consumer perspective, innovative goods and services should not be sophisticated. The
design of the web page or the yellow page should be simple and the words encoded in the page
should easily be decoded by the customers. The design of the website should be according to the
people who are ultimately going to use this page (Cooper and Zmud, 1997). There should be a
fast excess to the website. The most vital and the basic thing is that the technology should be
such which is very cheap, at the same time provides a high level of safety and security of the
18
dealings. By safety and security we means to say that there should be no act of hacking involved
in the transactions. If the act of illegal activities is taking place in the innovation then people will
not trust on these technology and they will not adopt them (Kerem, 2001). Thus, the consumer
will only adopt the new technology when they are assured that the procedure of e-payment will
be simple and people will do the transaction without any difficulty. The customers will not prefer
to use the new technology if they have to attain certain knowledge and skills before using it.
Thus, it will be unpopular among wide range of customers (Rogers, 1983)

Perceived Cost
Perceived cost may be defined as the estimated profit the customer will likely to get if they
started using a particular technology. If the estimated benefits that are likely to be achieve is
more than the present technology than only a customer will adopt the new otherwise not (Ching
and Ellis 2004). The new technology should not be expensive so that everyone can adopt it.
When we consider about the technology various other cost also have to be estimated like:
Ø preliminary investment expenses
Ø operational costs
Ø consumption costs
There are two major factors that are likely to influence the want of the customers, they are:
1. Price factor
2. Non- price factor
The price factor is very important as it forces the customer to leave the present brand and switch
over to the other. The price of the new technology should be less in comparison to the
competitors which are producing the similar technologies in order to attract more and more
customers (Gupta, 1988).
There are two kinds of cost which have to be paid when we use e-payment, they are:
1. The cost of internet connection or broadband- there monthly charges have to be paid for
using the internet.
2. The charges that the bank will take in using internet banking to do banking transactions.
The cost of setting up the new technology and the operational cost of the technology are
considered as the most important factors why people are not using e-payment. According to a
study it was observed that the people will not adopt the technology unless the financial benefits
19
that are likely to be achieved are more. Therefore, people will change their life style for that
(Bareczal and Ellen, 1997). With the easy technology and less transferring cost, customers that
are not satisfied with the work and the services of their banks can simply toggle from one bank to
other without any difficulty. In a promotional campaign, a bank offered free access to internet in
order to increase the popularity of e-payment and this promotional activity worked very well as
thousands of people adopted e-payment within few days (Botha, 2002)..

4.12. Perceived Risk

Perceived risk is said to be a risk that is associated with buying a particular technology. It is
significant to identify that the Risk can be one-sided. Thus, the risk which is in the mind of the
customer may be just imaginary. Risk is such a factor that forces a person to get detailed
knowledge about the good or a service. Risk of loss is a major factor that derives a person to
work sincerely to achieve its objectives. It is very correctly said that greater the risk involve in
the business, greater will be the profit. Thus, profit is a result of risk. When a new technology is
launched in the market, there is a very high ambiguity that the customer might face, like the new
technology will fulfill the need of the customers or not. If the customer feels insecurity about
something then it is said that he/she has perceived risk. There are 3 kinds of risk associated with
using a new innovation. They are:
1. Fiscal risk
2. substantial risk
3. societal risk
It has been seen from the recent trends that the safety and security risk are the major risk
associated with e-commerce and e-payment. With the arrival of new banks that are using e-
payment, people worry about the issue of safety and security has declined in India (Polatoglu and
Ekin, 2001). There has been a great need for safety and security in e-payment but also in many
other banking fields. Other fields include e-shopping, dealing with share and debentures using d-
matt account or online booking of tickets. Lesser the risk of safety more will be the adoption rate
of the people (Polatoglu and Ekin, 2001). Thus, banks that are providing e-payment facility
should develop such software which should not be prone to any of the illegal activity. In one
survey it was found that 80 percent of the people were worried that while using e-payment their
password could be hacked or illegal transaction may take place. In another study it has been
found that the customers are unwilling to share information about the banks because they think
20
that if they give the information there are chances that someone will hack it. If the financial
institution asks the customer about the information then to 58 percent of the people does not give
the information of their credit cards. The problem of security is the main cause of concern for the
adoption of e-payment by the people. Before the eagerness to adopt e-payment, one thing that the
bank officials should insure its customer is that of security. The customer will prefer e-payment
when they are assured that there is no risk involved in using it.
4.13. The Challenge Facing India
Due to the advent of e-payment many new areas has emerged in India. The expansion in these
areas has been sluggish and there is variety of reasons behind this. There has been a small stage
of internet dispersion and there are many deficiencies in the infrastructure of communication
system. In several parts of India people do not know about the benefits of using e-payment.
In India there are many sectors operating in which major part consists of enterprise which are
small and medium, the large enterprise are less in number. The small and medium size economy
are the backbone on which the growth and development of the economy depends. The e-payment
provides great growth opportunities for the middle and small sector enterprise and those include
those monetary advantage for creating new plan and policies and also provide some probability
through which the employment can be increased.
Thus, many companies of India are not willing to invest their capital in the fields of e-payment.
In one of the surveys conducted in India 60 percent of the companies did not have any kind of
involvement in internet and 80 percent of the companies are not concerned with any kind of
participation in e-payment. According to another survey it was seen that the business of
telecommunication grew from 18 percent to 40 percent in the year 1998. But out of the whole
industries working in India only 10 percent of them were only using internet in giving their
orders.
In one of the studies it was seen that there was a little existence of e-payment in India because it
was new industry and many of the business showed no interest in developing theses industry.
The most important factor for this is that there is a deficiency of proper framework and also there
are less security measures that could be taken to prevent illegal activities and improper banking
infrastructure mainly in the rural areas, the other cause of concern is that in India large part of the
people are uneducated. According to the above mentioned points one of the writer analyzed that
these were considered as the major factor that were creating hindrance for the development of e-
payment. Thus the major steps that should be taken compresses of the development of human
21
resource, the other factors should include that the attention should be given to reduce the
illiteracy of the people because if the people are not educated then what is the need to develop e-
payment. Those industries which are related to small and medium sector enterprise should be
given special offers by the government to do their business with the help of e-payment. And
special offers should be given to the entrepreneur in which women plays an important role. A
new technique which has very swift growth opportunities is developed regarding the use of e-
payment using the mobile in India. In this technology the people can buy and sell their things
using the mobiles and internet. This can be also used for various other purposes like B2G, C2C,
B2B and B2C. In many parts of India people are still using cash for doing their transactions
instead of doing transactions online or with the use of mobile, mainly in the small and medium
sector enterprise that are doing their business in rural areas. Only 0.05 percent of the people
living in India have their own account in the bank and only 10 percent of the people have cell
phones. Thus, it would be more easy and effective to do their transactions with the help of
mobile phones.
In India internet is a powerful medium for the development and growth of e-payment. In this
country the main cause of concern is that the expansion possibilities of the people working is
narrow and also there is an inadequacy in infrastructures. In many parts of India the people that
had started using internet has increased up to 200 percent in the present year and in India only 11
peoples has cell phones out of 100 peoples.

4.14. The Entry of Indian Banks into Electronic payment

E-PAYMENT is used as a new way for banking operations and also as an instrument for the
growth of a particular sector. E-payment is commonly used among all the countries of the world
and it is now popularly practiced in India now days. Despite having a slow economy in India, E-
payment has initiated a new era of banking in the country (Khan, 2001).
About 6 percent of the people living in India are availing proper banking facility. The population
of India is about 40 million and out of that 39 million people does not have a bank account, as
major part of the population is living below the poverty line and also the large percentages of the
people get less than 0.9 dollars a day for fulfilling their basic needs. In India, financial sector is
regarded as not so good field to invest in, as there is no profit for the companies like micro
financial agencies which are dealing with e-payment (Boex, J. and Martinez-Vazquez, J. 2006).
In India, the persons who operate their accounts through banks are approaching to about 3.5
22
million, marketing expert analyze this to be such large that even the non user are now attracted in
getting themselves a mobile banking service.
The increase in the adoption of e-payment is increasing at a rapid pace such that the countries
neighboring to India has nearly 7.5 million users of e-payment facility. The simple reason behind
the e-payment failure in India was because the marketing strategies in India have failed and the
main reason behind this was concerned to be the societal factors, civilizing factors and
topography factors. Thus, these factors are critical as to why the telecommunication in India is
weak. There are three companies which provide internet banking through cell phones is Reliance
Net Connect, Docomo, and MTS Blaze. Reliance Net Connect has about 47 percent of the
market share in the telecommunication industry and deals with 13 million dollars from its 9.5
million consumers.
E-PAYMENT is that is that technique which came into India in 1950. From that time the e-
commerce and other industry has seen a lot of growth in all the sectors. The industry of India
was controlled by the five banks which came together with the merger and acquisition out of the
total 90 banks which were present in India. In India the several branches of each bank plays an
important role. There are as much as 90 banks and their branches accounts for 3020. All the
industries that were present in this economy have to face several challenges like that of money
laundering and frauds. The lack of people’s confidence and the deficiency of investment capital
and the poor quality of the product is one of the other factors that are very crucial in India.
To solve these problems and issues the Reserve bank of India have came up with the solution
that the amount of the banks should be reduced and the banks that are present should be stronger
so that they are not affected by the depression or recession in the economy and the bank that are
present there should be reliable such that they will not cheat the people of India. Thus, the
Reserve bank of India should have such guidelines which protect the welfare of the people and
also strict rule should be enforced by them. Out of the 90 banks that were available in India only
25 banks are reputed which have better services and other banks are such which only motive is to
fraud the people of India and these banks provide better services to their customers and work for
the welfare of the people.
The work of the banks has been transformed from manual to the computerized system for doing
the transactions. In India previously when the computer was not into existence at that time
employees of the Union Bank of India does their transaction in the big registers and dual entry
system was used in doing the transactions so that at the end of the year the balance sheet gets
23
matched and the ledgers were used for doing the transactions. But today when the new
technologies are available then the people can do the transactions from any bank whether he/she
have an account in that bank or not. Suppose if a person has its account in any branch of the
Union Bank of India then in that case the customer of this bank can take out the money from any
of the branch and can deposit its money to any branch of the Union Bank of India. Thus, in the
year 1999 with the development of technology the people can do their transaction with the help
of e-payment. The people can do the transaction with the help of e-payment and the people do
not have to stand in line for doing the transactions.

Threats of Cyber Crime

Among all the internet scams, the advances fee fraud is one of the most frequently occurring
crimes which have its roots across the world. There are experts of cyber crime which can break
any kind of software. Cyber crime has expanded because of the advancement of technology. In
the early stages postal letters were used as a medium of committing cyber crimes, but in early
phase of 1991 postal cards were replaced by telecommunication (Narain, 2005). The cyber
expert’s use to call people through telephone and get information about the bank account
numbers and then try to hack their accounts. The latest method that cyber experts adopted is that
they created fake websites by using the names of the banks and when the people log on to these
websites, there e-payment IDs and password were hacked. The experts withdraw large sum of
money from the customer’s account. Another method which cyber crime experts used was that
they mail the people stating that the customer have won a cash prize of so and so amount and
when the customer respond to that message, the cyber expert ask for the detail of bank account.
The cyber experts transfer the amount in their accounts, thereby creating frauds. India has been
ranked as one of the major countries which are involved in cyber crimes. According to a
newspaper there has been a fraud of 2 billion in a year. In India government institutions are
involved in bribery and the people have never ending patience for it. The main reason is because
people cannot do anything much about it.
4.15. The Regulatory Challenges
The India government has introduced many acts to prevent illegal practices. Thus the regulatory
agencies are trying to match up with the quickly and dynamically varying banking environment
(Khanna, 2005).Thus these illegal practices have not been stopped because the government has
failed to enforce a strict act. If strict acts were enforced by the government of India then intensity
24
of cyber crime would be reduced considerably. In the last phase 1890s the government did not
succeed to make and implement adequate acts so that the cyber crime could be stopped, the basic
reason behind this was that the government lack people who have expert knowledge about how
to stop cyber crime. The banks were literally opened to all the types of uncertainty like
transaction risk, strategic risk and risk of foreign exchange (Khanna, 2005). In 2004, when the
government issued the rule for the use of internet banking, from that point there has been a
considerable amount of security for the customers that have adopted e-payment. According to the
guidelines that were issued, only one section deals with the protection against cyber crime, this
section states that there should be special set of rules and norms through which the work of the
websites should take place. In spite of having a number of sophisticated guidelines it was still
condemned because it lacks rules regarding the growing popularity of e-payment among people.
Among the recent amendment in the guidelines the growth of the banks could be affected.

4.16. E-PAYMENT Profitability and Efficiency

The commercial banks have attacked industrialization and are searching for new fields so as to
increase their services and increase their worth. Every bank is trying to be on top of their
competitors so that their services are best. In order to provide an edge over its customers, banks
are searching for new fields to provide services to its customers. By introducing new services
banks could increase its prosperity and effectiveness.

4.17. Bank Customer Relationship

The relationship between the customers and the banking official comes under the category bank
customer relationship. There should be harmonious relations between the banks and their
customers. The relationship includes an agreement where the customers give its precious things
with another person and those things will be taken again when there is a need for it. The
relationship is based on trusts and understanding. If trust is missing from either side then it will
not be possible to hold that relationship for a long period of time. The person who takes the
precious things and gives it back to the customer is bank. The foundation of connection is a
mutual agreement, thus agreement consists of certain norms and guidelines. The customer has
the legitimate right to take back those things which he/she has lent to the banks. The bank takes
the money in the form of deposits and lends those deposits in the form of loans. Banks charges
interests in place of loan and bank gives interest to the depositor of the money. The situation on
25
which the relationship is based should not be leaked by either of the party especially by the
financial institutions.

4.18. Operations of Financial Institution

The operations of financial institutions have increased tremendously; previously they provide
only basic services but not with the advent of industrialization many new fields have come in to
existence. Thus, there operational work has increased considerably. Financial institutions also
provide other services instead of traditional ones like they also give the facility to open D-matt
account which provides the facility of dealing with shares and debentures. They also provide the
facility to transmit the funds from investors to the organizations. The financial institutions boost
the flow of money in the financial system. The other services which the banks are offering are
that of brokerage, negotiator and underwriter.
5. Research Methodology
5.1. Introduction
In this part of the research, the researcher has used certain process and method to collect
important information. It has all the vital information to explain the population used in the study
like, method of sampling, range of samples, supply of data, techniques to gather data, procedure
of scrutinizing and the last is testing the hypothesis. Following two types of research are
employed in the study:
Quantitative Research
Qualitative Research
5.2. Quantitative research
A quantitative research paradigm is an empirical study of any issue through statistical and
numerical methods. The main objective of a quantitative research is to utilize mathematical and
statistical measures and techniques to research and study the issue. Computation and
measurement forms the core of the quantitative research as they associate the empirical
investigation with the quantitative representation. Quantitative data is the data which is in the
form of numbers, figures and statistics.
In quantitative research data is collected in numerical or statistical from the participants of the
research on the in subject of research. The data is analyzed through statistical methods and
techniques.

26
A major feature of quantitative research is that mathematical figures present an impartial results
and the collected information and results of the research can be applied on broader context.
In this study quantitative research paradigm has been employed in order to obtain and study
statistics pertaining to use and acceptance of the E-PAYMENT n the Union Bank of India. These
statistical modeling of the collected data gave important insights into many aspects of acceptance
of Electronic payment. The figures about the qualification of employees, the training on IT and
their professional degrees, satisfaction of employees with the training and statistics relating to
number of people comfortable with technology etc were analyzed to derive findings about
factors that can influence the implementation of E-PAYMENT system.

5.3. Qualitative Research

The quantitative as well as the qualitative research paradigms has been employed in the project.
The quantitative research in to the issue has highlighted the actual statistics about aspects of E-
PAYMENT in the Union Bank of India and has shown the behavior and attitude of the customers
and employees through figures and statistics.
E-PAYMENT is connected to human behavior as acceptance of the technology is closely linked
to ease of use that one feels when working through a new technology. The ease of use and
effortlessness depends on the qualification, ability and awareness but also on many behavioral
barriers that provide resistance when an individual is introduced to a new technology. The view
of people about the introduction of technology therefore has to be studied in order to get a clear
picture about the prospects for implementation.
Qualitative research provides a deep insight into the behavior of people towards any process and
activity and the reasons that forces this kind of attitude.
Hence, Qualitative research helps to understand the reasons behind these issues and has been
also been conducted in this project.
5.6. Population of the Study
40 staff personals of the Union Bank of India were used as population for this research. The
basic purpose behind using this population was to obtain maximum views relating to the
introduction of Electronic payment, so that an efficient conclusion can be drawn.
f
5.7. Sampling Techniques

27
Sample is a small part which represents the entire population thus; sample should be chosen
correctly in order to attain maximum information. The sample should be selected in such a
manner that all the section of the people is included in the population. In this research the sample
includes staff members of Union Bank of India.

5.8. Sample Size

Sample size can be defined as the total number of respondents that is to be taken from the
population. In this research, 40 respondents were taken from staff of the Union Bank of India .

5.9. Source of Data

There are two sources from which the data can be collected:
interview Secondary sources- The secondary data is collected from the information that is
available from the study of the past researchers. The secondary data source includes sources like
guidelines of e-payment, from the annual reports of Reserve bank of India.

5.10. Methods of Data Analysis

For data analysis many forms of tables, graphs, pie-charts, bar diagrams are used in drawing up
conclusions of the research. This study has been done by using descriptive and inferential
statistics. Occurrence calculation, percentage method were used in analyzing the data.
The responses in the questioners were tabulated and discussed. Test of hypothesis was also done
by use of chi-square method.

5.11. Test of Hypothesis and Inference

The chi-square test is a non-observed examination. Chi-square test is the inter-reliant feature,
integrity of healthy and particular discrepancy. In chi-square the model is chosen with the help of
exterior and unsystematic services and other steps should be in equivalent scale. The size of the
sample that is used in chi-square should be extremely big and the designed value of the chi-
square should be always smaller than 5. The work of chi-square is more than just testing the
quality of various magnitudes. The population can be categorizes on the two traits that are age
and performance of the job.

5.12. Characteristics
28
Chi-square focuses on rate of recurrence rather than factor
The test is based on non observance where there are no factors regarding the inflexibility of the
population
The preservative features are also available in chi-square method
This test is very useful in testing the hypothesis and the inner-reliance of the peoples
The chi-square test can also be used in building intricate emergency charts
The chi-square method is regularly applied in researches where there is a use of behavior and
research of the business

5.13. Applications
The usage of chi-square in testing:
The important use of chi-square is in assortment of samples
Goodness of fit is of a conjectural division the inner-reliance is in an emergency chart
The observed outcomes are consistent with predictable separation in proliferation test of inherent

5.14. Uses
The chi-square can be used to:
Examine the goodness of fit for single category or component
From the table that is comprising of rows and columns, in order to analyze the communication
between those rows and columns
Chi-square method was used by the researchers to know the prospective of the staff of the Union
Bank of India .
Chi-square method was used by the researchers to know the prospective of the staffs of the
Union Bank of India of India .
The formula of chi-square is:

Where Z2 = Chi-square
0i = Number of observed case in category i
Ei = Number of expected cases in category i
K = Number of category, summation runs from 1=1 to 1=K

5.9. Data Collection Tools

29
This can be categorized in two parts:
Primary data
Secondary data
5.10. Primary Data
The primary data is that data which is collected in the initial phase of the research. It is that
information which the researcher collects by himself when the research is in progress. The
primary data can be collected by followings types:
Questionnaire
Interview

5.11. Questionnaire
In questionnaire method there are certain sets of questions which the respondents have to answer.
The effectiveness of the questionnaire totally depends on the sincerity and dependability of the
respondents. There are several ways in which the questionnaire can be presented like open ended
and closed ended. A good questionnaire should have at least 12-15 questions in which 8-10
should be closed ended or multiple choice questions and 2-3 should be open ended questions.
The questionnaire is mainly used for a sample size population in order to get accurate, efficient
and effective results. The questionnaire is made according to the structured format. The response
to the questionnaire can be collected from the many ways like mail questionnaire, telephonic
questionnaire.
5.12. Interviews
Interviews are personal discussions in order to gather views and personal experience. There are
several ways through which the interview can be conducted; they may include questions which
are already prepared by the researcher prior to the interview. In another method the interviewee
may be provided with a specific subject and is asked to give his views and opinions to it. These
are subsequently recorded by the researcher. Sometime the researcher employs the technique
known as the critical incident. In this the researcher is given the topic which is very important for
the organization and the respondents are asked to present his perspective to that situation and see
how effectively he deals with that situation. The researcher sees that this topic is very importance
but this topic suffers from several demerits like this method is not as important as the group
discussion method in which there is a better expression of views.

30
5.13. Secondary Data
The secondary data comprises of that data which the researcher acquires from the sources like
magazines journals, annual reports of the company etc. basically it is that data which is already
available in several different resources. In the present research the researcher has used both the
primary data and secondary data. The techniques that the researcher has used in collecting
primary data are a questionnaire and interviews. The secondary data in the topic include the
annual report of the Union Bank of India . The questionnaire consists of questions which are
both close ended as well as open ended. The respondents were insured that their identities would
not be disclosed so as to make sure that they provide genuine responses and do not hide any
facts.

2.1 REVIEW OF LITERATURE

Miss. R. Elavarasi in her study on Customer Awareness and Preference towards E-Banking
Services of Banks studies about way us to customer awareness & to find out what they most
preferred e-banking services of ban.. The researcher has identified which commercial bank
provides better service with regards to e-banking services to customers and also identified
satisfaction level of customer view about internet banking website of ban.. The data analysis
shows that age, educational qualification, occupation, income level of customer are significant
factor that decide usage of e-banking services of various banks in the study area.

ANUSHU PREMCHAND In the modem society, no economic activity is possible without

payments and settlements. In this sense, it could probably be said that payment systems are one
of the most imperative and sign cant social infrastructures that we have. e-Payments are an
increasingly Important part of payment systems. They allow for quick international connectivity
in the payments world. e-Payment can be looked as a panacea for most ills in payment world, if
not all – financial inclusivity for unbanked. fast across the world transactions, safety and security
of payments and cost savings over traditional payment systems. In this paper, we look at e-
Payments, what they entail and basic payments infrastructure. We also look at the future of e-
Payments as well as challenges and recommendations for e-Payment systems of tomorrow. In the
next paper we will deep dive into the recommendations for e-Payments. Keywords—Payments,

31
Banking, E-Payments, bit coin, mobile payments, digital wallet payments, biometric payments,
financial service kiosks, NFC, financial inclusion.

Sanghita Roy, Dr. Indrapt Sinha stated that E- payment system in India, has shown tremendous
growth, but still there has lot to be done to Increase its usage. Still 90, of the transactions are cash
based. Technology Acceptance Model used for the purpose of study. They found Innovation,
Incentive, customer convenience and legal framework are the four factors which contribute to
strengthen the E- payment system.

Deepak Mathur E-commerce provides the capability of buying and selling products, information
and services on the Internet. In an ecommerce environment, payments take the form of money
exchange in an electronic tom), and are therefore called Electronic Payment. E-Payment system
is secure, there should be no threat to the user credit card number, smart card or other personal
detail, payment can be carried out without involvement of third party, It makes E payment at any
time through the internet directly to the transfer settlement and form E-business environment.
AXIS Bank Limited has initiated a new Electronic payment service called the AXIS Direct; this
facility brings all the operations and transactions of the barnk under the mobile banking facility.
According to AXIS Bank Limited, this facility allows Its customers access to their accounts any
time and provides all the banking facilities with more facilities being added, available to its
customers any time of the day.

INDIA TODAY, In India, most of the leading banks provide internet banking facilities. In the
country, there are forty-two banks and the sector is led by National Microfinance bank but ICICI
is currently leading in the field of IT enabled banking services.

Simko & Pello, E-payment systems are important mechanisms used by individual and
organizations as a secured and convenient way of making payments over the internet and at the
same time a gateway to technological advancement in the field of world economy.

Rakesh H M & Ramya T J in their research paper titled "A Study on Factors Influencing
Consumer Adoption of Internet Banking In India" tried to examine the factors that influence
internet banking adoption. It is found that internet banking is influenced by its perceived
32
reliability, Perceived ease of use and Perceived usefulness. In the process of internet banking
services expert should emphasize the benefits its adoption provides and awareness can also be
improved to attract consumers 'attention to internet banking services.

33
2.2 ARTICLES

ARTICLE: 1
TITLE: Credit or Debit or Smart Cards.
AUTHOR: Freedman
YEAR: (2000)

ABSTRACT:
purported that there are three drivers in an E-PAYMENT system i.e. stored value cards (Credit
or Debit or Smart Cards), access drivers and electronic money (internet transactions). E-
PAYMENT is overlooked mostly as because it uses new access devices that are not popularly
known to the people. Therefore, E-PAYMENT comprise of the value or money that is stored in
the form of stored value cards (Credit or Debit or Smart Cards) and the network money (money
stored in the hard drives of the computer).

ARTICLE: 2

TITLE: The banking institutions that have not upgraded their technology.
AUTHOR: Norton 1992 and Mishkin and Strahan 1999
YEAR: (1999)

ABSTRACT:
The banking institutions that have not upgraded their technology from time to time have lost
their market share by a considerable amount to other financial institutions. With the advancement
of technology, the data could be transferred from one country to the other within a short period
of time. Thus, it is becoming vital for successful banking because the work of the banks is more
of informational in nature.

34
ARTICLE: 3
TITLE: functioning of banking sector.
AUTHOR: Bradley and Steward, 2002). Berger (2003)
YEAR: (2003)

ABSTRACT:
in his study has found out that there has been transformations in the functioning of banking
sector due to the development of technology based financial expertise and communication
technology. The results that new technology has created should be noticed through
fundamentally varying financial sector.

ARTICLE: 4

TITLE: Growth In E-Payment.

AUTHOR: Suoranta and Mattila
YEAR: (2003)

ABSTRACT:
There has been a considerable growth in E-payment since the 90s when the use of technology in
banks was gaining widespread growth. Subsequently, it has generated curiosity in experts,
regarding the attitude of customers towards opting for technology or refraining from it.
Generally, the literature available on Internet banking revolves around on why the people are
accepting or rejecting E-payment.

35
ARTICLE: 5
TITLE: Common And Practical Technology.
AUTHOR: However, Lee
YEAR: (2003)

ABSTRACT:
states that the very common and practical technology acceptance model suffers from deficit in
providing adequate guidance to researchers. In spite of having an estimating power, it is not been
able to provide orderly assistance to scientists on how they can manipulate the mindset of people,
so that they can adopt e-payment. According to Lee et al (2003) there should be also be stress on
factors that make technology ease to operate. Current literature suffers from the drawback that it
does not facilitate a deeper insight on how consumers review that E-commerce will be helpful. In
addition, vigorous and theory based study on this factor or intervention is absent in E-payment
literature. Venkatesh and Bala (2008) have added to the technology adoption model and
categorized the interventions into two elements:

36
 CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE

37
INDUSTRY PROFILE
A bank is a financial institution that accepts deposits and channels those deposits into lending
activities. Banks primarily provide financial services to customers while enriching investors.
Government restrictions on financial activities by banks vary over time and location. Banks are
important players in financial markets and offer services such as investment funds and loans. In
some countries such as Germany, banks have historically owned major stakes in industrial
corporations while in other countries such as the United States banks are prohibited from owning
non-financial companies. In Japan, banks are usually the nexus of a cross-share holding entity
known as the keiretsu. In France, bancassurance is prevalent, as most banks offer insurance
services (and now real estate services) to their clients.
Introduction
India’s banking sector is constantly growing. Since the turn of the century, there has been a
noticeable upsurge in transactions through ATMs, and also internet and mobile banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian Parliament in 2019,
the landscape of the banking industry began to change. The bill allows the Reserve Bank of India
(RBI) to make final guidelines on issuing new licenses, which could lead to a bigger number of
banks in the country. Some banks have already received licences from the government, and the
RBI's new norms will provide incentives to banks to spot bad loans and take requisite action to
keep rogue borrowers in check.
Over the next decade, the banking sector is projected to create up to two million new jobs, driven
by the efforts of the RBI and the Government of India to integrate financial services into rural
areas. Also, the traditional way of operations will slowly give way to modern technology.
Market size
Total banking assets in India touched US$ 1.8 trillion in FY19and are anticipated to cross US$
28.5 trillion in FY25.
Bank deposits have grown at a compound annual growth rate (CAGR) of 21.2 per cent over
FY06–18. Total deposits in FY19were US$ 1,274.3 billion.
Total banking sector credit is anticipated to grow at a CAGR of 20.1 per cent (in terms of INR)
to reach US$ 2.4 trillion by 2021.

38
In FY17, private sector lenders witnessed discernable growth in credit cards and personal loan
businesses. AXIS Bank witnessed 171.6 per cent growth in personal loan disbursement in FY17,
as per a report by Emkay Global Financial Services. Axis Bank's personal loan business also rose
49.8 per cent and its credit card business expanded by 31.1 per cent.
Investments
Bengaluru-based software services exporter Mphasis Ltd has bagged a five-year contract from
Punjab National Bank (PNB) to set up the bank’s contact centres in Mangalore and Noida (UP).
Mphasis will provide support for all banking products and services, including deposits
operations, lending services, banking processes, internet banking, and account and card-related
services. The company will also offer services in multiple languages.
Microfinance companies have committed to setting up at least 30 million bank accounts within a
year through tie-ups with banks, as part of the Indian government’s financial inclusion plan. The
commitment was made at a meeting of representatives of 25 large microfinance companies and
banks and government representatives, which included financial services secretary Mr GS
Sandhu.
Export-Import Bank of India (Exim Bank) will increase its focus on supporting project exports
from India to South Asia, Africa and Latin America, as per Mr Yaduvendra Mathur, Chairman
and MD, Exim Bank. The bank has moved up the value chain by supporting project exports so
that India earns foreign exchange. In 2019–18, Exim Bank lent support to 85 project export
contracts worth Rs 24,255 crore (US$ 3.96 billion) secured by 47 companies in 23 countries.
Government Initiatives
The RBI has given banks greater flexibility to refinance current long-gestation project loans
worth Rs 1,000 crore (US$ 173.42 million) and more, and has allowed partial buyout of such
loans by other financial institutions as standard practice. The earlier stipulation was that buyers
should purchase at least 50 per cent of the loan from the existing banks. Now, they get as low as
25 per cent of the loan value and the loan will still be treated as ‘standard’.
The RBI has also relaxed norms for mortgage guarantee companies (MGC) enabling these firms
to use contingency reserves to cover for the losses suffered by the mortgage guarantee holders,
without the approval of the apex bank. However, such a measure can only be initiated if there is
no single option left to recoup the losses.
SBI is planning to launch a contact-less or tap-and-go card facility to make payments in India.
Contact-less payment is a technology that has been adopted in several countries, including
39
Australia, Canada and the UK, where customers can simply tap or wave their card over a reader
at a point-of-sale terminal, which reads the card and allows transactions.
SBI and its five associate banks also plan to empower account holders at the bottom of the social
pyramid with a customer call facility. The proposed facility will help customers get an update on
available balance, last five transactions and cheque book request on their mobile phones.
Road Ahead

India is yet to tap into the potential of mobile banking and digital financial services. Forty-seven
per cent of the populace have bank accounts, of which half lie dormant due to reliance on cash
transactions, as per a report. Still, the industry holds a lot of promise.
India's banking sector could become the fifth largest banking sector in the world by 2021 and the
third largest by 2025. These days, Indian banks are turning their focus to servicing clients and
enhancing their technology infrastructure, which can help improve customer experience as well
as give banks a competitive edge.
Exchange Rate Used: INR 1 = US$ 0.0173 as on October 28, 2021
The level of government regulation of the banking industry varies widely, with countries such as
Iceland, having relatively light regulation of the banking sector, and countries such as China
having a wide variety of regulations but no systematic process that can be followed typical of a
communist system.
The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy,
which has been operating continuously since 1772.
History
Origin of the word
The name bank derives from the Italian word banco "desk/bench", used during the Renaissance
by Jewish Florentine bankers, who used to make their transactions above a desk covered by a
green tablecloth. However, there are traces of banking activity even in ancient times, which
indicates that the word 'bank' might not necessarily come from the word 'banco'.
In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders
would set up their stalls in the middle of enclosed courtyards called macella on a long bench
called a bancu, from which the words banco and bank are derived. As a moneychanger, the
merchant at the bancu did not so much invest money as merely convert the foreign currency into
the only legal tender in Rome—that of the Imperial Mint.
40
The earliest evidence of money-changing activity is depicted on a silver drachm coin from
ancient Hellenic colony Trapezus on the Black Sea, modern Trabzon, c. 350–325 BC, presented
in the British Museum in London. The coin shows a banker's table (trapeza) laden with coins, a
pun on the name of the city.
In fact, even today in Modern Greek the word Trapeza (Τράπεζα) means both a table and a bank.
Traditional banking activities
Banks act as payment agents by conducting checking or current accounts for customers, paying
cheques drawn by customers on the bank, and collecting cheques deposited to customers' current
accounts. Banks also enable customer payments via other payment methods such as telegraphic
transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current accounts, by accepting term
deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by
making advances to customers on current accounts, by making installment loans, and by
investing in marketable debt securities and other forms of money lending.
Banks provide almost all payment services, and a bank account is considered indispensable by
most businesses, individuals and governments. Non-banks that provide payment services such as
remittance companies are not normally considered an adequate substitute for having a bank
account.
Banks borrow most funds from households and non-financial businesses, and lend most funds to
households and non-financial businesses, but non-bank lenders provide a significant and in many
cases adequate substitute for bank loans, and money market funds, cash management trusts and
other non-bank financial institutions in many cases provide an adequate substitute to banks for
lending savings to.
Entry regulation
Currently in most jurisdictions commercial banks are regulated by government entities and
require a special bank licence to operate.
Usually the definition of the business of banking for the purposes of regulation is extended to
include acceptance of deposits, even if they are not repayable to the customer's order—although
money lending, by itself, is generally not included in the definition.
Unlike most other regulated industries, the regulator is typically also a participant in the market,
i.e. a government-owned (central) bank. Central banks also typically have a monopoly on the
business of issuing banknotes. However, in some countries this is not the case. In the UK, for
41
example, the Financial Services Authority licences banks, and some commercial banks (such as
the Bank of Scotland) issue their own banknotes in addition to those issued by the Bank of
England, the UK government's central bank.
Accounting for bank accounts
Bank statements are accounting records produced by banks under the various accounting
standards of the world. Under GAAP and IFRS there are two kinds of accounts: debit and credit.
Credit accounts are Revenue, Equity and Liabilities. Debit Accounts are Assets and Expenses.
This means you credit a credit account to increase its balance, and you debit a debit account to
decrease its balance.
This also means you debit your savings account every time you deposit money into it (and the
account is normally in deficit), while you credit your credit card account every time you spend
money from it (and the account is normally in credit).
However, if you read your bank statement, it will say the opposite—that you credit your account
when you deposit money, and you debit it when you withdraw funds. If you have cash in your
account, you have a positive (or credit) balance; if you are overdrawn, you have a negative (or
deficit) balance.
The reason for this is that the bank, and not you, has produced the bank statement. Your savings
might be your assets, but the bank's liability, so they are credit accounts (which should have a
positive balance). Conversely, your loans are your liabilities but the bank's assets, so they are
debit accounts (which should also have a positive balance).
Where bank transactions, balances, credits and debits are discussed below, they are done so from
the viewpoint of the account holder—which is traditionally what most people are used to seeing.
Economic functions
1. issue of money, in the form of banknotes and current accounts subject to cheque or
payment at the customer's order. These claims on banks can act as money because they are
negotiable and/or repayable on demand, and hence valued at par. They are effectively
transferable by mere delivery, in the case of banknotes, or by drawing a cheque that the payee
may bank or cash.
2. netting and settlement of payments – banks act as both collection and paying agents for
customers, participating in interbank clearing and settlement systems to collect, present, be
presented with, and pay payment instruments. This enables banks to economise on reserves held
for settlement of payments, since inward and outward payments offset each other. It also enables
42
the offsetting of payment flows between geographical areas, reducing the cost of settlement
between them.
3. credit intermediation – banks borrow and lend back-to-back on their own account as
middle men.
4. credit quality improvement – banks lend money to ordinary commercial and personal
borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes
from diversification of the bank's assets and capital which provides a buffer to absorb losses
without defaulting on its obligations. However, banknotes and deposits are generally unsecured;
if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to
continue to operate, this puts the note holders and depositors in an economically subordinated
position.
5. maturity transformation – banks borrow more on demand debt and short term debt, but
provide more long term loans. In other words, they borrow short and lend long. With a stronger
credit quality than most other borrowers, banks can do this by aggregating issues (e.g. accepting
deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemptions of
banknotes), maintaining reserves of cash, investing in marketable securities that can be readily
converted to cash if needed, and raising replacement funding as needed from various sources
(e.g. wholesale cash markets and securities markets).
Law of banking
Banking law is based on a contractual analysis of the relationship between the bank (defined
above) and the customer—defined as any entity for which the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:
1. The bank account balance is the financial position between the bank and the customer:
when the account is in credit, the bank owes the balance to the customer; when the account is
overdrawn, the customer owes the balance to the bank.
2. The bank agrees to pay the customer's cheques up to the amount standing to the credit of
the customer's account, plus any agreed overdraft limit.
3. The bank may not pay from the customer's account without a mandate from the customer,
e.g. a cheque drawn by the customer.
4. The bank agrees to promptly collect the cheques deposited to the customer's account as
the customer's agent, and to credit the proceeds to the customer's account.

43
5. The bank has a right to combine the customer's accounts, since each account is just an
aspect of the same credit relationship.
6. The bank has a lien on cheques deposited to the customer's account, to the extent that the
customer is indebted to the bank.
7. The bank must not disclose details of transactions through the customer's account—
unless the customer consents, there is a public duty to disclose, the bank's interests require it, or
the law demands it.
8. The bank must not close a customer's account without reasonable notice, since cheques
are outstanding in the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the customer
and the bank. The statutes and regulations in force within a particular jurisdiction may also
modify the above terms and/or create new rights, obligations or limitations relevant to the bank-
customer relationship.
Some types of financial institution, such as building societies and credit unions, may be partly or
wholly exempt from bank licence requirements, and therefore regulated under separate rules.
The requirements for the issue of a bank licence vary between jurisdictions but typically include:
1. Minimum capital
2. Minimum capital ratio
3. 'Fit and Proper' requirements for the bank's controllers, owners, directors, and/or senior
officers
4. Approval of the bank's business plan as being sufficiently prudent and plausible.
Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals and small
businesses; business banking, providing services to mid-market business; corporate banking,
directed at large business entities; private banking, providing wealth management services to
high net worth individuals and families; and investment banking, relating to activities on the
financial markets. Most banks are profit-making, private enterprises. However, some are owned
by government, or are non-profit organizations.
Central banks are normally government-owned and charged with quasi-regulatory
responsibilities, such as supervising commercial banks, or controlling the cash interest rate. They
generally provide liquidity to the banking system and act as the lender of last resort in event of a
crisis.
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Types of retail banks
• Commercial bank: the term used for a normal bank to distinguish it from an investment
bank. After the Great Depression, the U.S. Congress required that banks only engage in banking
activities, whereas investment banks were limited to capital market activities. Since the two no
longer have to be under separate ownership, some use the term "commercial bank" to refer to a
bank or a division of a bank that mostly deals with deposits and loans from corporations or large
businesses.
• Community Banks: locally operated financial institutions that empower employees to
make local decisions to serve their customers and the partners.
• Community development banks: regulated banks that provide financial services and
credit to under-served markets or populations.
• Postal savings banks: savings banks associated with national postal systems.
• Private banks: banks that manage the assets of high net worth individuals.
• Offshore banks: banks located in jurisdictions with low taxation and regulation. Many
offshore banks are essentially private banks.
• Savings bank: in Europe, savings banks take their roots in the 20th or sometimes even
20th century. Their original objective was to provide easily accessible savings products to all
strata of the population. In some countries, savings banks were created on public initiative; in
others, socially committed individuals created foundations to put in place the necessary
infrastructure. Nowadays, European savings banks have kept their focus on retail banking:
payments, savings products, credits and insurances for individuals or small and medium-sized
enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly
decentralised distribution network, providing local and regional outreach—and by their socially
responsible approach to business and society.
• Building societies and Landesbanks: institutions that conduct retail banking.
• Ethical banks: banks that prioritize the transparency of all operations and make only what
they consider to be socially-responsible investments.
• Islamic banks: Banks that transact according to Islamic principles.
Types of investment banks
• Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for
their own accounts, make markets, and advise corporations on capital market activities such as
mergers and acquisitions.
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• Merchant banks were traditionally banks which engaged in trade finance. The modern
definition, however, refers to banks which provide capital to firms in the form of shares rather
than loans. Unlike venture capital firms, they tend not to invest in new companies.
Both combined
• Universal banks, more commonly known as financial services companies, engage in
several of these activities. These big banks are very diversified groups that, among other
services, also distribute insurance— hence the term bancassurance, a portmanteau word
combining "banque or bank" and "assurance", signifying that both banking and insurance are
provided by the same corporate entity.

Other types of banks

• Islamic banks adhere to the concepts of Islamic law. This form of banking revolves
around several well-established principles based on Islamic canons. All banking activities must
avoid interest, a concept that is forbidden in Islam. Instead, the bank earns profit (markup) and
fees on the financing facilities that it extends to customers.

AXIS BANK
Axis Bank India, the first bank to begin operations as new private banks in 1994 after the
Government of India allowed new private banks to be established. Axis Bank was jointly
promoted by the Administrator of the specified undertaking of the
• Unit Trust of India (UTI-I)
• Life Insurance Corporation of India (LIC)
• General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., the New India Assurance Company,
The Oriental Insurance Corporation and United Insurance Company Ltd.

EVOLUTION:
UTI was established in 1964 by an Act of Parliament; neither did the Government of India own it
nor contributes any capital. The RBI was asked to contribute one-half of its initial capital of Rs 5
crore, and given the mandate of running the UTI in the interest of the unit-holders. The State

46
Bank of India and the Life Insurance Corporation contributed 15 per cent of the capital each, and
the rest was contributed by scheduled commercial banks which were not nationalized then. This
kind of structure for a unit trust is not found anywhere else in the world. Again, unlike other unit
trusts and mutual funds, the UTI was not created to earn profits.
In the course of nearly four decades of its existence, it (the UTI) has succeeded phenomenally in
achieving its objective and has the largest share anywhere in the world of the domestic mutual
fund industry. '' The emergence of a "foreign expert" during the setting up of the UTI makes an
interesting story. The announcement by the then Finance Minister that the Government of India
was contemplating the establishment of a unit trust caught the eye of Mr. George Woods, the
then President of the World Bank. Mr. Woods took a great deal of interest in the Indian financial
system, as he was one of the principal architects of the AXIS, in which his bank, First Boston
Corporation Bank, had a sizeable shareholding. Mr. Woods offered, through Mr. B.K. Nehru,
who was India's Executive Director on the World Bank, the services of an expert. The Centre
jumped at the offer, and asked the RBI to hold up the finalization of the unit trust
Proposals till the expert visited India. The only point Mr. Sullivan made was that the provision to
limit the ownership of units to individuals might result in unnecessarily restricting the market for
units. While making this point, he had in mind the practice in the US, where small pension funds
are an important class of customers for the unit trusts. The Centre accepted the foreign expert's
suggestion, and the necessary amendments were made in the draft Bill. Thus, began corporate
investment in the UTI, which received a boost from the tax concession given by the government
in the 1990-91 Budget. According to this concession, the dividends received by a company from
investments in other companies, including the UTI, were completely exempt from corporate
income tax, and provided the dividends declared by the investing company were higher than the
dividends received.

The result was a phenomenal increase in corporate investment which accounted for 57 per cent
of the total capital under US-64 scheme. Because of high liquidity the corporate sector used the
UTI to park its liquid funds. This added to the volatility of the UTI funds. The corporate lobby
which perhaps subtly opposed the establishment of the UTI in the public sector made use of it for
its own benefits later. The Government-RBI power game started with the finalization of the UTI
charter itself. The RBI draft of the UTI charter stipulated that the Chairman will be nominated by
it, and one more nominee would be on the Board of Trustees. While finalizing the draft Bill, the
47
Centre changed this stipulation. The Chairman was to be nominated by the Government, albeit in
Consultation with RBI. Although the appointment was to be made in consultation with the
Reserve Bank, the Government could appoint a person of its choice as Chairman even if the
Bank did not approve of him.
Later on in 2002 the UTI was renamed to Axis Bank.

48
BUSINESS DESCRIPTION
The Bank's principal activities are to provide commercial banking services which include
merchant banking, direct finance, infrastructure finance, venture capital fund, advisory,
trusteeship, forex, treasury and other related financial services.

CORPORATE PROFILE
Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid Corporate, SME, Agriculture
and Retail Businesses.

The Bank has a large footprint of 1787 domestic branches (including extension counters) and
10,363 ATMs spread across 1,139 centers in the country as on 31st December 2012. The Bank
also has 7 overseas branches / offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai,
DIFC - Dubai and Abu Dhabi.

Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India
(SUUTI) (then known as Unit Trust of India),Life Insurance Corporation of India (LIC), General
Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India
Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance
Company Ltd. The shareholding of Unit Trust of India was subsequently transferred to SUUTI,
an entity established in 2003.

With a balance sheet size of Rs.2,85,628 crores as on 31st March 2012, Axis Bank is ranked 9th
amongst all Indian scheduled banks. Axis Bank has achieved consistent growth and stable asset
quality with a 5 year CAGR (2007-12) of 31% in Total Assets, 30% in Total Deposits, 36% in
Total Advances and 45% in Net Profit.
The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis House has received
the ‘Platinum’ rating awarded by the US Green Building Council for its environment friendly
facilities and reduction of carbon emission.

49
SUBSIDIARIES
The Bank has set up six wholly-owned subsidiaries:

Axis Securities and Sales Ltd. (Since renamed Axis Capital Ltd.)
Axis Private Equity Ltd.
Axis Trustee Services Ltd.
Axis Asset Management Company Ltd.
Axis Mutual Fund Trustee Ltd.
Axis U.K. Ltd.

PROMOTERS:
UTI Bank Ltd. has been promoted by the largest and the best Financial Institution of the country,
UTI. The Bank was set up IN 1993 with a capital of Rs. 115 crore, with
• UTI contributing Rs. 100 crore,
• LIC - Rs. 7.5 crore
• GIC and its four subsidiaries contributing Rs. 1.5 crore each.

Axis Bank is today one of the most competitive and profitable banking franchise in India. Which
can be clearly seen by an analysis of its comprehensive portfolio of banking services including
Corporate Credit, Retail Banking, and Business Banking, Capital Markets, Treasury and
International Banking.
CAPITAL STRUCTURE
The Bank has authorized share capital of Rs. 500 crores comprising 500,000,000 equity shares of
Rs.10/- each. As on 31st March, 2012 the Bank has issued, subscribed and paid-up equity capital
of Rs. 413.20 crores, constituting 413,203,952 shares of Rs. 10/- each. The Bank’s shares are
listed on the National Stock Exchange and the Bombay Stock Exchange. The GDRs issued by
the Bank are listed on the London Stock Exchange (LSE).
DISTRIBUTION NETWORK

50
The Bank has a network of 1787 domestic branches (including extension counters) and 10,363
ATMs across the country, as on 31st December 2012, the network of Axis Bank spreads across
1,139 cities and towns, enabling the Bank to reach out to a large cross-section of customers with
an array of products and services. The Bank’s overseas network consists of 4 branches in
Singapore, Hong Kong,
DIFC – Dubai and Colombo and 3 Representative offices at Shanghai, Dubai, and Abu Dhabi.

BUSINESS OVERVIEW
An overview of various business segments

RETAIL BANKING
• Axis Bank has developed a strong retail banking franchise over the years. Retail Banking
is one of the key drivers of the Bank’s growth strategy and it encompasses a wide range of
products delivered to customers through multiple channels. The Bank offers a complete suite of
products across deposits, loans, investment solutions, payments and cards to help customers
achieve their financial objectives. The Bank focuses on product differentiation as well as a high
level of customer-service to enable it to build its retail business.
• The Bank has continued to develop its risk management capabilities in Retail business,
both from a credit and operations risk standpoint. The branch channel is effectively utilized for
growing the retail assets business, with loan and card products being offered to existing clientele.
• The growth areas identified by the Bank are in the areas of residential mortgages and
passenger car loans. Of the total retail loans portfolio, 88.47% is in the form of secured loans
(residential mortgages and auto loans).
• The Bank offers a wide range of payment solutions to its customers in the form of debit
cards, prepaid cards and credit cards. As on 31st March 2012, the Bank has a base of
approximately 124.99 lac debit cards, placing it among the leading players in the country. The
Bank is also a dominant player in prepaid cards. Axis Bank has over 2 lakh installed EDC
machines - a highest for any bank in India.
• Axis Bank Privée’, an exclusive private banking service offers advisory, investment and
lending solutions to its customers across 10 cities in the country. Privée follows a client-focused
investment process and a team-based approach for managing client relationships. The
relationship management team is supported by a team of product specialists, client servicing
51
teams, investment consultants and research experts. The private banking business focuses on
addressing both the personal and corporate advisory needs of an entrepreneur or business family
by bringing solutions offered by various business groups across the retail and corporate
businesses within the Bank under an integrated platform.
• The Bank launched ‘Axis Bank Wealth’ in 2008-09 targeting customers who have a total
relationship value with the Bank of between Rs.30 lacs and Rs.200 lacs. The value proposition
aims at delivering a ‘One Bank’ experience to such customers and is positioned as a complete
solution involving banking, investment and asset needs.
• The Bank also distributes third party products such as mutual funds, Bank assurance
products (life and general insurance), online trading, Gold and Silver coins through its branches.
• The retail business of the Bank is supported by innovative services and alternate channels
which provide convenience of transactions to customers. These channels include an extensive
ATM network, internet banking, mobile banking and phone banking.
International Retail
• International Retail Business focuses specifically on the overseas sales channel, retail
foreign exchange business, remittances and retail businesses in overseas centres such as Hong
Kong and Sri Lanka, where the Bank has a presence. The products offered in the area of retail
Forex and remittances include travel currency cards, inward and outward wire transfers,
traveler's cheques and foreign currency notes, remittance facilities through online portals as well
as through collaboration with correspondent banks, exchange houses and money transfer
operators. The Bank continued to have a market leadership position in Travel Currency Cards
with 11 currency options other than INR being offered. The aggregate spends on Travel
Currency Cards have crossed USD 3 billion during the year 2012-13.
BUSINESS BANKING

• Business Banking leverages the Bank’s strengths – a well distributed network of branches
and a strong technology platform to offer the best in transaction banking services. The Bank
offers a range of current account products and cash management solutions across all business
segments covering corporate, institutions, central and state government ministries and
undertakings as well as small and retail customers.

52
• The Bank is one of the top CMS providers in the country. The Bank acts as an agency
bank for transacting government business offering services to various Central Government
Ministries / Departments and other State Governments and Union Territories.
• In order to provide solutions for business to effectively manage their funds flow, the
Bank has introduced liquidity management solution for corporate customers. Similarly, a single
window for all payment requirements was launched with several advanced features such as
setting a daily transaction limit for corporate users, setting transaction limits for individual
beneficiaries, prioritizing payment methods, online stop payment and cancellation facilities.

CORPORATE CREDIT
• Axis Bank has built a strong corporate banking franchise across corporate, liability and
asset businesses. Axis Bank provides customized structuring and financing solutions in a timely
and comprehensive manner to its corporate customers with a focus on building out a high quality
credit portfolio. The Bank is a market leader in Debt Capital Markets and loan syndication
business across segments, sectors and geographies. The Bank also provides full range of
Treasury and Trade Finance solutions to its corporate clients. The Bank offers technology
enabled transaction banking and cash management services to customers across Government,
financial institutions and corporate segments.
• Bank’s infrastructure business includes project and bid advisory services, project lending,
debt syndication, project structuring and due diligence, securitization and structured finance.
During the year the Bank launched its first ever ‘D&B-Axis Bank Infra Awards 2011’ in
association with Dun & Bradstreet. The award felicitates leading infrastructure projects and
infrastructure companies. In October 2010, the Bank launched the Axis Infra Index (AII) with
the primary objective of conveying a sense of investment conditions in the infrastructure sector.
The Index, as a composite measure of investor confidence, comprises four components: flow of
equity and debt funds into infrastructure sectors, project completion and commencement of
operations, output related to infrastructure segments and regulatory and policy developments
relevant for the sector. It is designed to capture the evolving fundamentals of the sector and is
updated and disseminated on a quarterly basis.
TREASURY

53
• The Bank has an integrated Treasury, covering both domestic and global markets, which
manages the Bank’s funds across geographies. The Bank’s treasury business has grown
substantially over the years, gaining market share and continuing to be among the top five banks
in terms of forex revenues. The Treasury plays an important role in the sovereign debt markets
and participates in the primary auctions held by RBI. It also actively participates in the secondary
government securities and corporate debt market. The foreign exchange and money markets desk
is an active participant in the inter-bank/ FI space. The Bank has been exploring various cross-
border markets to augment resources and support customer cross-border trade. The Bank has
emerged as one of the leading providers of foreign exchange and trade finance services. It
provides a gamut of products for exports and imports as well as retail services. Its cutting edge
technology provides comprehensive and timely customer services.

INTERNATIONAL BANKING

• The international operations of the Bank form a key enabler in its strategy to partner with
the overseas growth potential of its domestic clientele, who are venturing abroad or require non-
rupee funds for domestic projects. The Bank now has a foreign network of four branches
(Singapore, Hong Kong, DIFC (Dubai) and Colombo (Sri Lanka)) and three representative
offices (Shanghai, Dubai and Abu Dhabi) with presence in six countries. While corporate
banking, trade finance, treasury and risk management solutions are the primary offerings through
the branches at Singapore, Hong Kong, DIFC (Dubai) and Colombo, the Bank also offers retail
liability products from its branches at Hong Kong and Colombo. Further, the Bank’s Gulf Co-
operation Council (GCC) initiatives in the form of representative offices in Dubai and Abu
Dhabi, and alliances with banks and exchange houses in the Middle East provide the support for
leveraging the business opportunities emanating from the large NRI diaspora present in these
countries.
SMALL AND MEDIUM ENTERPRISES

• The Small and Medium Enterprises (SME) segment is a thrust area of the Bank. The
business approach towards this segment, which is expected to contribute significantly to
economic growth in future, is to build relationships and nurture the entrepreneurial talent
54
available. The relationship based approach enables the Bank to deliver value through the entire
life cycle of SMEs. The Bank has segmented its SME business in three groups: Small
Enterprises, Medium Enterprises and Supply Chain Finance. The Bank extends working capital,
project finance as well as trade finance facilities to SMEs. The Bank has launched ‘Business
Gaurav SME Awards’ in association with Dun & Bradstreet to recognize and award achievers in
the SME space.

INFORMATION TECHNOLOGY

• Technology is one of the key enablers for business and delivery of customized financial
solutions. The Bank continues to focus on introducing innovative banking services through
investments in scalable and robust technology platforms that delivers efficient and seamless
services across multiple channels for customer convenience and cost reduction. The Bank has
also focused on improving the governance process in IT. The Bank has launched the Business
Process Management System, a reusable system, which helps to build process efficiencies across
various areas of operations.
• The Bank has undertaken various steps in order to align itself towards RBI guidelines on
security and governance, including setting up of Board and Executive level committees and
working on IT operations and other key areas.
AGRICULTURE

• The Bank continues to drive and expand the flow of credit to the agricultural sector. 401
branches of the Bank have dedicated officers for providing farm loans. Products and solutions
are created specifically with simple features and offered at affordable rates to rural customers.
The Bank has also adopted a value-chain approach, wherein end-to-end solutions are being
provided for various stakeholders. It also offers various customized solutions to meet the
regional requirements.
FINANCIAL INCLUSION

• The Bank perceives financial inclusion (FI) not as a corporate social responsibility or a
regulator driven initiative but as a large business opportunity that lies untapped in the rural and
unexplored section of the urban market. Till March 2012, the Bank has opened over 4.4 million
55
No-Frills accounts in over 7,607 villages through a network of 15 Business Correspondents and
nearly 6,000 customer service points. The Bank has a strong presence in the Electronic Benefit
Transfer (EBT) space and has covered around 6,800 villages across 19 districts and 9 states till
date with over 3.7 million beneficiaries.
• In the urban space, the Bank has launched financial inclusion initiatives in Bangalore,
Chennai and Delhi targeting migrant labourers, slum dwellers and other under-banked sector of
the urban population and has opened over 3.5 lac No Frill accounts. The Bank’s financial
inclusion efforts are not merely restricted to launching of financial inclusion initiatives and
sourcing basic No Frill accounts, but to also promote the savings habits and enable the customers
to obtain customized solutions for their financial needs.
• The Bank also has a range of other customized products for this customer segment like
different variants of Axis Uday No Frills Savings Accounts, Chhota RD, Chhota FD, and Chhota
SIP. The Bank has been one of the first few banks to have tied-up with telecom companies to
offer remittance led financial inclusion services on the mobile platform.

HUMAN RESOURCES
• The Bank aims in creating and developing human capital to realize its vision of nurturing
a mutually beneficial relationship with its employees. Employee engagement and learning,
leadership development, enhancing productivity and building multiple communication platforms
thus occupied centre stage in the Bank’s HR objective. The Bank continues to maintain a strong
employer brand in the financial services sector especially on the campuses of the premier
business schools of the country. In a major initiative, the Bank launched Axis Academic
Interface Program (AAIP) with Institutions to offer youngsters an understanding about the
financial services industry, and creating ‘Axis Bankers’. So far, the Bank has tied up with
Manipal University, NIIT, IFBI and Gowhathi University.
• Axis Bank has a young workforce with an average age of 29 years. The equal opportunity
employer policy of the Bank contributes strongly to the Axis Bank brand
Board of Directors
PERSON DESIGNATION

56
Dr. Sanjiv Misra Chairman

Shikha Sharma Managing Director & CEO

Som Mittal Director

Rohit Bhagat Director

Ireena Vittal Director
K. N. Prithviraj Director
V. R. Kaundinya Director

S. B. Mathur Director

Prasad Menon Director

Rabindranath Bhattacharyya Director

Prof. Samir K Barua Director

A.K. Dasgupta Director

Varadarajan Srinivasan ED, Corporate Banking

Somnath Sengupta ED, Corporate Center

57
Mission

• Customer service and product innovation tuned to diverse needs of individual and
corporate clientele.
• Continuous technology up gradating while maintaining human values.
• Progressive globalization and achieving international standards.
• Efficiency and effectiveness built on ethical practices.
• Customer Satisfaction through providing quality service effectively and efficiently.

VISION AND VALUES

Vision 2016
To be the preferred financial solutions provider excelling in customer delivery through insight,
empowered employees and smart use of technology
Core Values

• Customer Centricity
• Ethics
• Transparency
• Teamwork
• Ownership

UNIT: AXIS BANK LIMITED

Jeevan Prakash Building
Sector 17-B
Chandigarh- 160017
Tel: 0172- 5062917

Registered Office
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden,
Ellis Bridge,
Ahmedabad – 380 006. Tel No. : 079 – 2640 9322 Fax No. : 079 – 2640 9321

58
Email: p.oza@axisbank.com/rajendra.swaminarayan@axisbank.com
Web site: www.axisbank.com
The Corporate Office

Axis Bank Limited,

Corporate Office,
Bombay Dyeing Mills Compound,
Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Tel: (022) 2425 2525

59
Axis bank offers its services majorly in four parts:

A. Personal
A. Corporate
B. NRI
C. Priority banking

A. Personal
Axis bank offers various services for individual domestic customers, which includes services like
1. Accounts
2. Deposits
3. Loans
4. Cards
5. Forex
6. Investments
7. Insurance
8. Payments
9. Other services

1. The accounts offered by axis bank for its customers are:

. Easy Access Savings Account
• Future Stars Savings Account
• Krishi Savings Account
• Prime Savings Account
• Prime Plus Savings Account
• Basic Savings Account
• Women’s Savings Account (smart privilege account)
• Priority banking Account
• Demat Account
• Senior citizen’s Account
• Defense Salary Account

60
• Trust/NGO Savings Account
• Insurance Agent Account
• Resident Foreign Currency (Domestic) RFC(D) Account
• Pension Savings Bank Account
• Youth Account
• 3-in-1 Online Investment Account

Deposits offered by Axis Bank:

a) Fixed Deposits
Axis Bank offers simple reinvestment Fixed Deposits (at very competitive interest rates), which
can be opened with a minimum investment of Rs 10,000. Customers can make additions to your
deposit in multiples of Rs 1,000 each. The tenure of their deposit must be a minimum of 6
months.
b) Recurring Deposits
Axis Bank's Recurring Deposit scheme will allow you with an opportunity to build up your
savings through regular monthly deposits of fixed sum over a fixed period of time.
Features
• Recurring deposits are accepted in equal monthly installments of minimum Rs 1,000 and
above in multiples of Rs 500 thereafter.
• The fixed numbers of installments for which a depositor can opt are 12, 24, 36, 39, 48,
60, 63, 72, 84, 96, 108 and 120 months.
• Transfer of Accounts - a recurring deposit account can be transferred from one office of
the Bank to another branch.
• The amount of installment once fixed, cannot be changed.
• Installment for any calendar month is to be paid on or before the last working day of the
month. Where there is delay in payment of installment, one can regularize the account by paying
the defaulted installment together with a penalty (at present it is @ PLR plus 4 % for the period
of delay).Fraction of a month will be treated as full month for the purpose of calculating the
penalty.
• The total amount repayable to a depositor, inclusive of interest, depends on the amount of
monthly installments and the period of deposit.

61
c) Encash 24
The Encash 24 (Flexi Deposit) gives the liquidity of a Savings Account coupled with high
earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit linked to your Savings
Account providing you the following unique facilities:
• Maximum Returns:
Customer’s money is no longer idle. As soon as the balance in your Savings Account crosses
over Rs 25,000, the excess, in multiples of Rs 10,000 will be transferred automatically to a
higher interest earning Fixed Deposit Account. The maturity of fixed or term deposits formed as
a result of transfer of money from the Savings Bank account will be for a maximum period of
181 days and the interest will be calculated on simple interest rate basis.
• Maximum Liquidity:
The money parked in Fixed Deposits as a result of the above mentioned sweep out from your
Savings account can be easily accessed by issuing a cheque, withdrawing through ATM etc. The
amount broken form your Fixed Deposit will earn interest rates at the applicable rate for the
period that the deposit was held with the Bank. The remaining amount of Fixed Deposit will
continue to earn the contracted rate of interest.

62
CHAPTER-IV
DATA ANALYSIS

63
Data Analysis and Discussion of Findings.
What is Descriptive Analytics?
90% of organizations today use descriptive analytics which is the most basic form of analytics.
The simplest way to define descriptive analytics is that, it answers the question “What has
happened?”. This type of analytics, analyses the data coming in real-time and historical data for
insights on how to approach the future. The main objective of descriptive analytics is to find out
the reasons behind precious success or failure in the past. The ‘Past’ here, refers to any particular
time in which an event had occurred and this could be a month ago or even just a minute ago.
The vast majority of big data analytics used by organizations falls into the category of
descriptive analytics.
A business learns from past behaviors to understand how they will impact future outcomes.
Descriptive analytics is leveraged when a business needs to understand the overall performance
of the company at an aggregate level and describe the various aspects.
Dr. Michael Wu, chief scientist of San Francisco-based Lithium Technologies describes
descriptive analytics as -“The simplest class of analytics, one that allows you to condense big
data into smaller, more useful nuggets of information.”
Descriptive analytics are based on standard aggregate functions in databases, which just require
knowledge of basic school math. Most of the social analytics are descriptive analytics. They
summarize certain groupings based on simple counts of some events. The number of followers,
likes, posts, fans are mere event counters. These metrics are used for social analytics like average
response time, average number of replies per post, %index, number of page views, etc. that are
the outcome of basic arithmetic operations.
The best example to explain descriptive analytics are the results, that a business gets from the
web server through Google Analytics tools. The outcomes help understand what actually
happened in the past and validate if a promotional campaign was successful or not based on basic
parameters like page views.
What is Predictive Analytics?
The subsequent step in data reduction is predictive analytics. Analyzing past data patterns and
trends can accurately inform a business about what could happen in the future. This helps in
setting realistic goals for the business, effective planning and restraining expectations. Predictive

64
analytics is used by businesses to study the data and ogle into the crystal ball to find answers to
the question “What could happen in the future based on previous trends and patterns?”
Dr. Michael Wu, chief scientist of San Francisco-based Lithium Technologies said -"The
purpose of predictive analytics is NOT to tell you what will happen in the future. It cannot do
that. In fact, no analytics can do that. Predictive analytics can only forecast what might happen in
the future, because all predictive analytics are probabilistic in nature."
Organizations collect contextual data and relate it with other customer user behaviour datasets
and web server data to get real insights through predictive analytics. Companies can predict
business growth in future if they keep things as they are. Predictive analytics provides better
recommendations and more future looking answers to questions that cannot be answered by BI.
Predictive analytics helps predict the likelihood of a future outcome by using various statistical
and machine learning algorithms but the accuracy of predictions is not 100%, as it is based on
probabilities. To make predictions, algorithms take data and fill in the missing data with best
possible guesses. This data is pooled with historical data present in the CRM systems, POS
Systems, ERP and HR systems to look for data patterns and identify relationships among various
variables in the dataset. Organizations should capitalize on hiring a group of data scientists in
2016 who can develop statistical and machine learning algorithms to leverage predictive
analytics and design an effective business strategy.

Predictive analytics can be further categorized as –

1. Predictive Modeling –What will happen next, if ?
2. Root Cause Analysis-Why this actually happened?
3. Data Mining- Identifying correlated data.
4. Forecasting- What if the existing trends continue?
5. Monte-Carlo Simulation – What could happen?
6. Pattern Identification and Alerts –When should an action be invoked to correct a process.
Sentiment analysis is the most common kind of predictive analytics. The learning model takes
input in the form of plain text and the output of the model is a sentiment score that helps
determine whether the sentiment is positive, negative or neutral.
Organizations like Walmart, Amazon and other retailers leverage predictive analytics to identify
trends in sales based on purchase patterns of customers, forecasting customer behaviour,
forecasting inventory levels, predicting what products customers are likely to purchase together
65
so that they can offer personalized recommendations, predicting the amount of sales at the end of
the quarter or year. The best example where predictive analytics find great application is in
producing the credit score. Credit score helps financial institutions decide the probability of a
customer paying credit bills on time.
What is Prescriptive Analytics?
Big data might not be a reliable crystal ball for predicting the exact winning lottery numbers but
it definitely can highlight the problems and help a business understand why those problems
occurred. Businesses can use the data-backed and data-found factors to create prescriptions for
the business problems, that lead to realizations and observations.
Prescriptive analytics is the next step of predictive analytics that adds the spice of manipulating
the future. Prescriptive analytics advises on possible outcomes and results in actions that are
likely to maximize key business metrics. It basically uses simulation and optimization to ask
“What should a business do?”
Prescriptive analytics is an advanced analytics concept based on –
• Optimization that helps achieve the best outcomes.
• Stochastic optimization that helps understand how to achieve the best outcome and
identify data uncertainties to make better decisions.
Simulating the future, under various set of assumptions, allows scenario analysis - which when
combined with different optimization techniques, allows prescriptive analysis to be performed.
Prescriptive analysis explores several possible actions and suggests actions depending on the
results of descriptive and predictive analytics of a given dataset.
Prescriptive analytics is a combination of data, mathematical models and various business rules.
The data for prescriptive analytics can be both internal (within the organization) and external
(like social media data).Business rules are preferences, best practices, boundaries and other
constraints. Mathematical models include natural language processing, machine learning,
statistics, operations research, etc.
Prescriptive analytics are comparatively complex in nature and many companies are not yet
using them in day-to-day business activities, as it becomes difficult to manage. Prescriptive
analytics if implemented properly can have a major impact on business growth. Large scale
organizations use prescriptive analytics for scheduling the inventory in the supply chain,
optimizing production, etc. to optimize customer experience.

66
Aurora Health Care system saved $6 million annually by using prescriptive analytics to reduce
re-admission rates by 10%. Prescriptive analytics can be used in healthcare to enhance drug
development, finding the right patients for clinical trials, etc.
As increasing number of organizations realize that big data is a competitive advantage and they
should ensure that they choose the right kind of data analytics solutions to increase ROI, reduce
operational costs and enhance service quality.
Descriptive Analytics
Descriptive methodologies focus on analyzing historic data for the purpose of identifying
patterns or trends. Analytic techniques that fall into this category are most often associated with
exploratory data analysis which identifies central tendencies, variations, and distributional
shapes. Descriptive methodologies can also search for underlying structures within data when
no a priori knowledge about patterns and relationships are assumed. This can include correlation
analysis, exploratory factor analysis, principal component analysis, trend analyses, and cluster
analysis. The following tutorials walk you through common forms of descriptive analytics.
Numerical Data Descriptive Statistics

Descriptive statistics are the first pieces of information used to understand and represent a
dataset. Their goal, in essence, is to describe the main features of numerical and categorical
information with simple summaries. These summaries can be presented with a single numeric
measure, using summary tables, or via graphical representation. Here, I illustrate the most
common forms of descriptive statistics for numerical data but keep in mind there are numerous
ways to describe and illustrate key features of data.

Introduction
The researcher distributed 40 questionnaires to the respondents of the Union Bank of India .
When the respondents have finished the questionnaire they were returned back and the
researcher have tartan the questionnaires. Out of the 40 questionnaires 34 were done in an
appropriate manner while 3 did not come back and 3 were unfinished. Thus 85 percent of the
employees of the Union Bank of India give their questionnaires.

67
Presentation and Analysis of Data
Qualification of Respondents
The researcher was given the chance so that they could meet the respondents. The chart given
below demonstrates the qualification of the respondents:

ALTERNATIVES RESPONDENTS PERCENTAGE

BSC 1 3%

BCA 8 24%

BSC 15 43%

MBA 5 15%

MSC 5 15%

TOTAL 34 100%

The above table displays the qualifications of the respondents. The information gathered shows
that 3% people has done BSC, 24% people has done BCA, while the major percentage of people
that is 43% has done BSC and only 15% of the people has done MBA and MCA.

68
 35

30

25

20 PERCENTAGE
15 RESPONDENTS

10

0
BSC BCA BSC MBA MSC TOTAL

6.4. Working Experience

The researcher has met with the employees of the Union Bank of India to know the working
experience of the people:
ALTERNATIVES RESPONDENTS PERCENTAGE

1-4 years 7 20%

5-9 years 13 38%

10-14 years 8 24%

15-19 years 6 18%

Above 20 years 0 0%

TOTAL 34 100%

The above table displays the working experience of the employees working in the bank. It is
evident that only 20% employees fall in the experience of 1-4 years, 38% employees are between
5-9 years which have the major share, 8 respondents have the experience of 10-14 years, whereas
6 respondents fall in the slab of 15-19 years and none of the employees have the experience of
above 20 years.

69
 35

30

25

20
PERCENTAGE
15
RESPONDENTS
10

0
1-4 5-9 10-14 15-19 Above TOTAL
years years years years 20
years

6.5. Designation of the Respondents

The researcher has chosen the respondents from different designation.
ALTERNATIVES RESPONDENTS PERCENTAGE

Junior Officer 16 47%

Senior Credit Officer 18 53%

TOTAL 34 100%

The researcher has chosen 47% of the junior officers and 53 % of the senior officers as the
respondents. Thus, the Union Bank of India has more senior officers and less junior officers.

70
 35

30

25

20 PERCENTAGE
15 RESPONDENTS
10

0
Junior Officer Senior Credit TOTAL
Officer

6.6. Professional Qualification

The researcher has asked the respondents of Union Bank of India about their professional
qualifications:
ALTERNATIVES RESPONDENTS PERCENTAGE

Associated Chartered Accountant 17 50%

Chartered Institute of Bankers of India 14 41%

Certified Auditor 2 6%

Certified Information System 1 3%

TOTAL 34 100%

71
According to the research 50% of the bankers of India were Chartered accountants, while 41
percent of the people of Chartered Institute of Bankers of India opted there carrier as banking
and 6% and 3% are Certified Information System and auditors.

35
30
25
20
15
10
5 PERCENTAGE
0
RESPONDENTS

6.7. Department of Respondents

The respondents that the respondents have selected are from different departments:
ALTERNATIVES RESPONDENTS PERCENTAGE

Human Resource Department 4 12%

Accounts Department 12 35%

Business Development 4 12%

Information Technology 2 6%

Credit And Marketing 12 35%

72
TOTAL 34 100%

The above table displays that about 12% of the people are working in human resource
department, 35% people are a part of accounts department and credit and marketing department
while only 12 and 6% are a part of IT and business development department. From the above
chart it is evident that major share of the people are from the department of marketing thus the
main focus behind this is the company has to increase its share in the market.
14

12

10

8
PERCENTAGE
6
RESPONDENTS
4

0
Human Resource Accounts Business
Department Department Development

6.8. Threat to Electronic payment

The researcher has asked the people to write the threats of Electronic payment. The responses of
the people are given below:
ALTERNATIVE RESPONDENTS PERCENTAGE

Adequate security 20 58%

Legal threat 7 21%

ATM Fraud 4 12%

Poor Communication link 3 9%

73
TOTAL 34 100%

35
30
25
20
15
10
PERCENTAGE
5
0 RESPONDENTS

The above table has proved that the major threat is because of the security. As the people do not
want that their bank account number and the Ids should not be hacked. Security threats are about
58%, 21% are because of the legal factors, while 12 and 9% threats are caused because of the
ATM and poor communication skills.

6.9. Threat Assessment

The researcher has asked the respondents to present their views on the assessment of threats. The
outcomes were displayed below:
ALTERNATIVE RESPONDENT PERCENTAGE

To a high extent 2 6%

To a moderate extent 24 70%

74
To a lower extent 4 12%

No respond 4 12%

TOTAL 34 100%

Above are the assessments of the threats of Union Bank of India . High threat was 6% and is
considered low, 70% of the threat was moderate and 12% each was the response was the threat
from the lower and no response zone. Thus from the above chart it is known that bank do not
have much threat from the e-payment.

35

30
25

20 PERCENTAGE

15

10
RESPONDENT
5
0
To a high To a To a No TOTAL
extent moderate lower respond
extent extent

6.10. Respondent Assessment of Union Bank of India E-PAYMENT System

The researcher has asked the respondents about the assessment Union Bank of India e-payment
system. The views of the respondents are given below:
ALTERNATIVE RESPONDENTS PERCENTAGE

Excellent 4 12%

75
Very Good 24 70%

Good 2 6%

Fair 1 3%

Poor 3 9%

TOTAL 34 100%

From the above table, it is stated that 70% of the respondents of the Union Bank of India
considered assessment as very good, 12% sees it as excellent, while 6% prefer good and 3%
prefer it as fair and 9% considered the assessment as poor.

35
30
25
20
15 RESPONDENTS
10 PERCENTAGE
5
0

6.11. Information Technology Training Program

The researcher has asked the respondents of the Union Bank of India about the technology that
they are using in the information technology training program me. The prospective of the people
were displayed below:

76
ALTERNATIVE RESPONDENTS PERCENTAGE

Strongly agreed 3 9%

Agreed 24 70%

Undecided 2 6%

Disagree 4 12%

Strongly disagree 1 3%

TOTAL 34 100%

From the above table it is clear that 70% of the people agreed for the assessment of the training
program. 9% of the respondents strongly agreed to it, 6% were undecided and 12% disagree
while 3% strongly disagree. Thus the management of the bank organizes the training program
from time to time because 70% of the people like to get training program.

Chart Title
35
30
25
PERCENTAGE
20
RESPONDENTS
15
ALTERNATIVE
10
5
0
1 2 3 4 5 6 7

6.12. Level of Electronic payment

77
The researchers would like to know from the respondents about the level of Electronic payment.
The personal views of the respondents are given below:
ALTERNATIVE RESPONDENT PERCENTAGE

Strongly agreed 10 29%

Agreed 20 59%

Undecided 3 9%

Disagree 1 3%

Strongly disagree 0 0%

TOTAL 34 100%

35

30

25

20 PERCENTAGE
RESPONDENT
15
ALTERNATIVE
10

0
1 2 3 4 5 6 7

78
CHAPTER-V
FINDING
SUGGESTION
CONCLUSION

79
 FINDINGS OF THE STUDY

• The overall percentage of servicemen having complete knowledge about E- payment

services provided by the bank while opening an account in it is 40%, those having some idea
about it is 50% and the percentage of people have no awareness of E- payment services provided
by the bank is 10%. It can reasonably, be concluded that nearly 85% of the population is having
awareness about E- payment services.

• The percentage distribution of awareness avenues, the major skewness is in favour of

advertisements, which score 36% among different avenues such as personal visit, executives of
the banks, advertisements and friend/relatives. While the least score is for friends (or) relatives.

• Among those aware about 35 persons use E- payment services, which is 70% of total
population studied.

• E-wallet information is provided by social media, TV (or) magazines, friends, family or

relatives etc, of which the first four have been covered. Amongst these TV (or) magazines scores
the largest information status (44%) and second largest information status from social media
(30%), and friends (18%) and least information status from family (or) relatives ie.,(8)%.
• When asked to list various benefits accruing from the usage of E- payment, easy fund
transfer received highest percentage score at 44% among different benefits such as time saving
(24%), inexpensive (32%), others (0%). Quite interestingly, Inexpensive feature scored more
than the Time saving of the E- payment services. The other benefits accruing to the people
include ready availability of funds, removal of middlemen and no rude customer relation
executives.
• Among the users, various problems that are encountered while using E- payment
services.

80
• Card misuse and its misplace are major reasons that create hurdles in its usage, while
time consumption, accounting mistakes such as amount debited but not withdrawn and change of
mobile number seem to be the least bothering problems.
• From the non users, an attempt was made to elicit the reasons for its non usage..
Satisfaction with traditional banking was considered as prime de-motivating factor, followed
closely by the fear of insecurity, then ‘hidden cost’ factor, which suggested their resistance to
change, which to some extent can be countered by aggressive advertisement and utilizing other
modes of awareness dissemination as well.

81
SUGGESTIONS

• Issuers of E-PAYMENT will need to take great care to ensure that the danger of
counterfeiting is minimized and they must be very vigilant in monitoring their systems and
operations so that fraud can be detected quickly when it occurs.
• Issuers should emphasize on a well-written and prominently displayed assurance of
security encryption.
• Enhancement on every sophisticated security systems should be done at least every
month, to prevent hackers from stealing both money and personal information.
• Higher priority must be given to the enhancement of encryption mechanism in order to
maintain security and privacy.
• They should constantly upgrade hardware and software whenever a new feature of
enhancing security becomes available.
• Besides, issuers should create the possibility of having face-to-face interactions to ensure
institutional and customers trust is maintained.
• Highly confidential information such as customers’ personal identity number or other
code should not be revealed to anyone other than the owner itself.
• Customers should get themselves exposed to E-PAYMENT systems in order to gain
experience and increase trust on the existing security.
• Customers must also be able to:
• comply with the terms and conditions
• notify the issuer of the loss/theft of the E-PAYMENT Instrument (EPI)
immediately.
• keep track on the balance, especially after each transactions
82
 • protect identity/code number from public’s view
• update personal information at least every two months once
• Most E-PAYMENT cost only around one-third to one-half as much as a paper-based non
cash payment and it is clearly understood that the cost of a payment system could be
considerably reduced if it is shifted to electronics.
• Therefore, bank should provide payment services according to their differential costs of
services, so users may choose the payment instrument with the lowest net price/non price cost.
• Give proper training to customers for using electronic E-PAYMENT.
• Create a trust in mind of customers towards security of their accounts.
• Provide a platform from where the customers can access different accounts at single time
without extra charge.
• Make there sites more users friendly.
• Customers should be motivated to use E-PAYMENT facilities more.

83
CONCLUSION

The usage of E- payment is all set to increase among the service class. The service class at the
moment is not using the services thoroughly due to various hurdling factors like insecurity and
fear of hidden costs etc. So banks should come forward with measures to reduce the
apprehensions of their customers through awareness campaigns and more meaningful
advertisements to make E- payment popular among all the age and income groups. Further, with
increasing consumer demands, banks have to constantly think of innovative customized services
to remain competitive. E- payment is an innovative tool that is fast becoming a necessity. It is a
successful strategic weapon for banks to remain profitable in a volatile and competitive
marketplace of today.

In future, the availability of technology to ensure safety and privacy of e-transactions and the
RBI guidelines on various aspects of internet banking will definitely help in rapid growth of
internet banking in India.

84
APPENDICES - QUESTIONNAIRE
BIBILOGRAPHY

85
 QUESTIONNAIRE
1. While opening of your bank account are you aware of e-payment services
Provided by your bank?
A. Fully aware
B. Had an idea
C. No idea
2. If answer to the question no.1 is C,how did you know about E-payment services of
your bank ?
A. Personal visit
B. Advertisements
C. Executives from the bank
D. Friends or relatives
3. Do you use e-payment services?
A. yes
B. No
4.How familiar are you with computer usage level of your bank
A. No knowledge
B.Average knowledge
C. Beginner
D. Expert
5. Which category of banks do you consider as most technologically advanced ?
A. Public sector banks
B. Private sector banks
6. Where did you get the information about e-wallets
A. social media
B. TV or magazines
C. friend
D. family or relatives
7. Which e-wallet do you prefer most of the time
A. patym
B. Tez

86
 C. google wallet
D. others
8. Mostly which purpose do you use e-wallets?
A. Money transfer
B. Recharge
C. Utility bill E-PAYMENT
D. others
9.Which attribute of the bank do you value the most
A. Quality of service
B. Trust
C. Type of the bank
D. Technology used
10. In which bank do you have your account?
A. SBI
B. Andhra bank
C. AXIS
D. others
11. Which of the following benefits accrue to you while opening
e-payment services?
A. Time saving
B. Inexpensive
C. Easy fund transfer
D. Others
12. What can be safely shared when you do cashless transactions ?
A. Aadhar card
B. PAN
C. Bank account number
D. credit / debit card no
13. What is your biggest concern about cashless E-PAYMENT ?
A. Security
B. poor internet connectivity
C. merchant acceptability
87
 D. Lack of technology
14. What do you keep in mind while doing e-E-PAYMENT ?
A. Available discounts
B. premium offers
C. cash back
15. To what extend are you satisfied with your bank’s e-payment services ?
A. Highly satisfied
B. Neutral
C. satisfied
D. dissatisfied

88
BIBLIOGRAPHY
Reference
Data Base Management System in Raghu Rama Krishna Tata Mighrahill
Data Base Management System in Korth Tata Mighrahill
Efren G Mallach, “Decision Support & Data Warehouse Systems”
Jame Evans, Business Analytics, Pearson, Second Edition, 2017.
George M. Marakas, “Decision Support System” In the 21st century, PHI, EEE, Second
Edition
Jason Hunter William Crawford & Paula Ferguson, Java Servlet Programming, 2nd Edition
Ali Bahrami, Object Oriented Analysis and design using UM, 2nd Edition Tata McGraw Hills
(2009)
Creating a winning E-Business H. Albert Napier, Ollie Rivers, Stuart, Napier Cengage
Learning second Edition
Books
Marketing Management – Philip Kotler
Marketing.Com – Vijay Mukhi
E-Business Essentials- Matt Haig
Magazines
Business Today -March3, 2002 subscription
Articles
Economic Times- December 15, 2001
Indian Express-September 3, 2000
Personnel
Mr. Vikram Kumar, Director, MAQ Softwares( Project Guide )
Mr. JeetuChimnani, Chief Executive Officer, J-Info
Websites
www.rediff.com
www.axisbank.com
www.airtel.com
www.hungama.com
www.fabmart.com

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www.j-info.com
www.internetworldstats.com

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