The internet banking is changing the banking industry and is having the major effects on banking relationships. It involves use of internet for delivery of banking products and services i.e., from minimum functionality sites that offer only access to deposit account data to highly sophisticated offerings enabling integrated sales of additional products and access to other financial services- such as investment and insurance. The primary drivers of Internet banking are improve customer access, facilitate the offering of more services, increase customer loyalty, attract new customers, provide services offered by competitors and reduce customer attrition. The evolution of technology in Indian banking sector may be categorized as (i) introduction of mechanised banking -1960 (ii) introduction of computer based banking industry-1970 and (iii) introduction of computer-linked communication based banking. The banking industry in India is facing an unprecedented competition from non-traditional banking institutions, which presently offers banking and financial services over the internet. The deregulation of the banking industry coupled with the emergence of new technologies, are enabling new competitors to enter to the financial services market quickly and efficiently.
India’s banking sector is growing at a faster pace. India has become one of the most preferred banking destinations in the world. The reasons are numerous: the economy is growing at a rate of 8%, bank credit is growing at 30% per annum and there is an ever expanding middle class of between 250 and 300 million people (larger than the population of the US) in need of financial services. Considering the above scenario of emerging market in internet banking there exists a necessity of understanding customer perceptions in details. This will help the banks to focus on customer needs and in the process they can provide qualitative services which leads to customer satisfaction.