Introduction of internet banking will expand banking market, lower marginal production costs and make customers more sensitive to interest rates of financial products. The sensitivity can be represented by hazard rate. It is expected that market price will fall and quantity demanded will rise in equilibrium. Whether a bank introduces internet banking relies on the entry cost, the marginal cost reduction , the hazard rate and the degree of market expansion It is more likely for an incumbent bank to introduce internet banking when the entry cost is lower, the marginal cost reduction is higher the hazard rate is higher or the degree of market expansion is greater ‘ Introducing internet banking can be used as an entry deterrence measure.