THE INDIAN INTERNET BANKING JOURNEY

The most significant benefit of Internet banking is the ready accessibility of bank accounts at all times. The inconvenience of visiting and waiting at the banks is also eliminated. This result in, enhanced customer satisfaction, reduced customer attrition and increased customer base. Internet banking considerably reduces transaction costs for the banks. According to a study conducted by consultants Booz-Allen & Hamilton, the cost of an average transaction on the Internet is as low as 13 cents, compared to $ 1.07 through the branch, 54 cents through the telephone and 27 cents through the ATM. The study also stated that Internet banking helped banks reduce the branch load and attract future customers.

FIGURE I
INTERNET BANKING TRANSACTION MECHANISM

Source: ICMR.

In India, the cost of one banking transaction through the Internet amounted to 10 paise to the bank, as compared to Re.1 through a branch, 45 paise through an ATM, 35 paise through phone banking and 20 paise through debit cards.The low transaction costs and the promising picture painted by analysts induced many banks in India to introduce Internet banking services during the late 1990s. However, only few of them succeeded in moving beyond the launch of the website. ICICI's Internet banking service 'Infinity' became the most recognized and popular service in the country, providing a wide range of products and services.

ICICI - INTERNET BANKING INITIATIVES

HURDLES IN INTERNET BANKING