A

RESEARCH REPORT

ON

‘’Analysis of Consumer Satisfaction from E – Banking Services.

SUBMITTED IN THE PARTIAL FULFILLMENT OF COURSE FOR THE

AWARD OF

THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

Submitted To Submitted By
Mr. Himanshu Goel Fahad Mohammad Hussain
Roll no-1608570029
MBA 4th Sem.

S.D. COLLEGE OF MANAGEMENT STUDIES

MUZAFFARNAGAR

1
 DECLARATION

Hereby I declare that project report titled “Satisfaction from E – Banking services. A

complete study of State Bank Of India. Submitted for the awarded degree of MASTER OF

BUSINESS ADMINISTRATION, is my original work and the project report has not formed

the basis for the award of any diploma, degree, associate ship, fellowship or similar other

titles. It has not been submitted to any other university or institution for the award of any

degree or diploma.

Date: Fahad Mohammad Hussain

Place: MBA (4th sem)

SDCMS (Marketing)

2
 ACKNOWLEDGEMENT

I take this opportunity to express our deep sense of gratitude to all those who Have
contributed in making my report a success. Every project is blend of effort and learning on
the part of students and knowledge and experience of the expert in their respective fields.
I am gratified to MR. HIMANSHU GOEL for providing this knowledgeable
oppurtunity, and the faculty of SD College of Management Studies and to MR. ALOK
KUMAR GUPTA (PRINCIPAL) of MBA for giving us an opportunity to explore the
corporate world practically.
I express my profound sense of gratitude and indebtedness towards all of them For
providing every information every information, assigning various task, guidance,
appreciating and correcting us thought our project period.
Last but not the least; I would like to express gratitude to all friends and colleague
Who helped me throughout the period and gave me proper response and co-operating in our
various activities with their patience.
.

FAHAD MOHAMMAD HUSSAIN

3
 PREFACE

Someone has rightly said that practical experience is for better and closer to the real world
then mere theoretical exposure. The practical experience helps the students view the real
world closely, which in turn widely influences their perceptions and argument their
understanding of the real situation.
Research work constitutes the backbone of any management education program me. A
management student has to do research work quite frequently during his entire span.
The research work entitle ‘’To study the Customer satisfaction towards E-BANKING
with reference to STATE BANK OF INDIA in Muzaffarnagar ” aims to analyze E-
banking various services provided by state bank of India. For this purpose
MUZAFFARNAGAR city have been chosen.

This particular project has been conducted at SBI. In the first phase of the research project,
there is a introduction of Banking, company profile and products of SBI are given. After that
a market research is performed with a sample size of 100 people. The research study was
limited to Muzaffarnagar. Here, in my survey, I have contacted the respondents through
personal interviews with the help of questionnaires.

The main objective of the research is to know the customer satisfaction level and their
perception regarding SBI and to know the customer awareness regarding the SBI’s products.

SBI should lay more stress on advertisements, both in print as well as in other media.
Opening up the sector will certainly mean new products, better packaging and improved
customer service. Both new and existing players will have to explore new distribution and
marketing channels. Potential buyers for most of Banks lie in the middle class.

4
 EXECUTIVE SUMMARY

The report contains the organizational study done at STATE BANK OF INDIA. The report
title is “CUSTOMER SATISFACTION REGARDIND STATE BANK OF INDIA”.

The report gives an overview of the banking Sector and company profile. And awareness of
customers about different types of products and services offered by SBI.

This study was conducted to find out the customer satisfaction regarding SBI.

The methodology adopted for the study was through a structured questionnaire, which is
targeted to the different persons in Muzaffarnagar. For this purpose sample size of 100 was
taken. The data collected from the different persons was analyzed thoroughly and presented
in the form of charts and tables.

SBI must advertise regularly and create brand value for its products and services. Most of its
competitors like ICICI, Axis, kotak Mahindra and nationalized banks use television
advertisements to promote their products. The Indian consumer has a false perception about
private banks – they feel that it would not safe.

Safety and returns are the two main reasons people invest in banks. On the whole SBI is a
good place to work at. Every new recruit is provided with extensive training on the products
of SBI. This training enables an advisor/sales manager to market the policies better. The
company should try to create awareness about itself in India. . With an improvement in the
sales techniques used, a fair bit of advertising and modifications to the existing product
portfolio, SBI would be all set to capture the banking market in India as it has around the
globe.

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 CONTENTS

Title Page No.

 Introduction to the study 07-22

 Introduction to the Industry 23-30

 Company Profile 31-53

 Research Methodology 54

- Title of the study 55

- Objective of the study 56

- Type of research 57-58

- Method of data collection 59-60

- Scope of study 61

- Limitation of study 62

 Data Analysis and Interpretation 63-91

 Facts and Findings 92-93

 Conclusion 94

 Recommendation and Suggestions 95

 Appendix 96-98

 Bibliography 99

6
 INTRODUCTION OF THE STUDY
Literature Review

 Daniel (1999) defines electronic banking as the delivery

of banks' information and services by banks to customers via different delivery
platforms that can be used with different terminal devices such as a personal computer
and a mobile phone with browser or desktop software, telephone or digital television.
 According to Birch and Young (1997) analyzed the consumer side for e-banking and
the results showed that consumers basically seek for transactional efficiency, choice
for core and non-core banking products and access to competitive prices and returns

• Simpson (2002) suggests that e-banking is driven largely by the prospects of

operating costs minimization and operating revenues maximization. A comparison of
online banking in developed and emerging markets reveal that in developed markets
lower costs and higher revenues are more noticeable.

• Joseph et al. (1999) examined the influence of internet on the delivery of banking
services. They found six primary dimensions of e-banking service quality such as
convenience and accuracy, feedback and complaint management,efficiency, queue
management, accessibility and customization.

• Mols (1999) acknowledged that the internet banking is an innovative distribution

channel that offers less waiting time and a higher spatial convenience than traditional
branch banking with significantly lower cost structure than traditional delivery
channels. Internet banking reduces not only operational cost to the bank but also leads
to higher levels of customer satisfaction and retention. As a result internet banking is
very attractive to banks and consumers, who now have higher acceptance to new
technology.

7
Background of the study
In today’s fast pace life where most of the people in family working including
women’s there is no feasible timing when they can visit the bank .E- banking
is solution to this problem but still e-banking has not got that much
acceptance in India except metros and tier-1 cities. The study is undertaken to
know awareness and preference towards e-banking services of State Bank of
India in Muzaffarnagar

Problem statement
The e- banking services has not yet accepted to appreciable level in cities
other than metros. To penetrate further in market, banks need to make
strategy to deal with creating awareness and preference towards banking. The
study is undertaken to know awareness and preference towards e-banking
services of STATE Bank of INDIA in Muzaffarnagar.

E – BANKING:

Businesses operating as banks today may be insurance companies, auto manufacturers

offering their own loan services, or retailers with branded low-interest credit cards. In a
global marketplace characterized by rapid deregulation, mergers and acquisitions, pervasive
wireless computing, and a proliferation of companies offering services that once were solely
the domain of banks, no bank can afford to stand with its existing business model.

Around the world, banks are facing new challenges in their battle to compete successfully.
As ease of entry increases, competition to provide banking services will constantly grow and
change. Business and residential clients will be more independent in their selection of
services, especially with the creation of online banking services, where they can easily select
the packages best suited to their needs. Customer attraction and loyalty will be increasingly
hard-earned, while operational costs and time to market will need to be reduced and closely
controlled.

8
Need for e-commerce banking solutions

On top of these developments, the exploding volume and complexity of transactional data
that banks must manage and use effectively is straining the capabilities of many IT
infrastructures to operate profitably.
Increasingly, the goal of leading banking institutions is to offer the global market a diversified
range of financial products and services via a single e-commerce portal. Broadly defined, e-
commerce is all the transactional commerce conducted electronically between businesses and
other businesses (B2B), between businesses and their end-customers (B2C) and within an
enterprise, over the Internet, extranets and intranets.
Many industry analysts foresee an accelerating growth in “e-markets” – frictionless global
networks that link multiple buyers and sellers together to provide high-volume commercial
transactions with high security, dynamic pricing and significant cost savings. In the area of
pervasive computing, IBM estimates that by 2003, there will be 2.6 billion network access
devices worldwide, including cell phones and hand-held computers. Whatever the forecasts,
it is clear that e-commerce is coming, and the financial markets will reward those firms that
best exploit the power of the Internet.
But in the intensely competitive networked banking marketplace, the demands of e-
commerce go far beyond simple interconnection. Competitive demands have made clear the
need for banks to stay at the cutting edge of e-commerce technology so they can provide high
levels of service all the time, anywhere, over any communications channel. Banks need e-
commerce systems that are integrated with the entire chain of back office and business
decision processes for optimum flexibility, responsiveness to changing market requirements
and profitability. The time for advanced e-commerce is now if you don’t want to be left
behind by your traditional and new competitors.

To achieve and maintain an edge on its competition, a bank needs an open e-commerce
platform that can:
• Integrate new e-commerce applications with existing applications to optimize IT
investments and save on reprogramming and management costs
• Provide the power and scalability to handle multiple workloads, shift resources to match
changing workloads, handle unpredictable peaks, and grow with your business
• Provide rock-solid security and advanced services availability for transactions all the time,
around the world – absolute essentials for competitive banking
9
• Exploit the value of your customer and market data by deploying business intelligence (BI)
and customer relationship management (CRM) software to help you better anticipate,
understand and respond to customer wants and needs
•Unify your enterprise management chain with an open server platform that integrates
purchase and sales processes with information on customers and product offerings for more
timely, targeted and personalized customer service
• Integrate future technologies and new ways of doing business with customers.

Banking structure in India

Scheduled Banks in India

(A) Scheduled Commercial Banks

Public sector Private sector Foreign Banks Regional Rural

Banks Banks in India Bank

(28) (27) (29) (102)

 Nationalized
Bank
 Other Public
Sector Banks
(IDBI)
 SBI and its
Associates
(B) Scheduled Cooperative Banks

Scheduled Urban Cooperative Scheduled State Cooperative

Banks (55) Banks (31)

Here we more concerned about private sector banks and competition among them. Today,
there are 27 private sector banks in the banking Sector: 19 old private sector banks and 8 new
private sector banks. These new banks have brought in state-of-the-art technology and
aggressively marketed their products. The Public sector banks are facing a stiff competition
from the new private sector banks. The banks which have been setup in the 1990s under the
guidelines Of the Narasimham Committee are referred to as NEW PRIVATE SECTOR
BANKS.

10
 ROLE OF E – BANKING IN THE BANKING SECTOR:

Electronic banking (e-banking) is the newest delivery channel of banking services. The
definition of e- banking varies amongst researches partially because electronic banking refers
to several types of services through which a bank’s customers can request information and
carry out most retail banking services via computer, television or mobile phone (Daniel,
1999; Mols, 1998; Sathye, 1999). Burr, 1996, for example, describes it as an electronic
connection between the bank and customer in order to prepare, manage and control financial
transactions. Electronic banking can also be defined as a variety of the following platforms:
(a) Internet banking (or online banking), (b) telephone banking, (c) TV-based banking, (d)
mobile phone banking, and (e) PC banking (or offline banking). In this paper, the ATM
(Automated Teller Machine) channel is also added to the research. The channels comprise
two major groups: the traditional channels and e-channels. (1) The traditional channels are
defined on the basis of the type of human assistance: teller, retail or corporate manager. (2) E-
channels are divided into 4 sub-groups on the basis of how the channel is seen by clients,
with some exceptions based on the technological processes of transaction execution: Internet-
based (online bank for corporate clients Telehansa.net, online bank for private clients
Hanza.net, offline bank for large corporate clients Telehansa), card-related (ATM –
Automated Teller’s Machine and POS –payment terminal), Phone channels (call center, IVR,
mobile bank) and Automated channels (“virtual” bank core channels where direct debit and
incoming payments are effected). Services are one of the primary benefits which a customer
looks for while adopting a new channel. The consumers consider the benefits and weigh them
against the costs associated. The Internet offers a lot of benefits to consumers, like any time
anywhere banking, updated information, convenience, faster transaction, etc. E – Banking
services are replacing traditional services and creating a new scale in transformation. In the
initial stage, e- channels were introduced in metropolitan cities and urban areas, but recently
some banks have started focusing on rural and semi urban areas. New private sector banks are
taking the lead in capturing rural and semi urban sector. The different e- channels such as
ATMs, Credit and debit cards, Tele-banking, Mobile – banking, online – banking and Smart
Cards, are changing the face of the retail banking sector. New private sector banks and
foreign banks are attracting customers in a big way. The potential customers and big
companies are shifting their accounts from traditional banks (not fully computerized) to E -
banks (fully computerized and provide different e – channels). If traditional banks, mostly
11
public sector banks, do not transform their business by introducing IT, their survival will
become difficult, as now-a-days IT is not a matter of convenience but a survival factor.
Therefore, e – banking services are a potent factor for transformation in this e – age.

History of internet banking

The concept of Internet banking has been simultaneously evolving with the
development of the World Wide Web. Programmers working on banking databases came up
with ideas for online banking transactions, some time during the 1980's. The creative
processes of development of these services were probably sparked off after many companies
started the concept of online shopping. The online shopping promoted the use of credit cards
through Internet. Many banking organizations had already started creating data ware housing
facilities to ease their working staffs. The developments of these databases were widely used
during the development of ATM's.
Sometime in 1980's, banking and finance organizations in Europe and United States
started suggestive researches and programming experiments on the concept of 'home
banking'. Initially in the 80's when computers and Internet were not so well developed, 'home
banking’ made use of fax machines and telephones to facilitate their customers. The wide
spread of Internet and programming facilities created further opportunities for development
of home banking.
In 1983, the Nottingham Building Society, commonly abbreviated and refereed to as
the NBS, launched the first Internet banking service in United Kingdom. This service formed
the basis for most of the Internet banking facilities that followed. This facility was not very
well developed and restricted the number of transactions and functions that account holders
could execute. The facility introduced by Nottingham Building Society is said to have been
derived from a system known as Prestel that is deployed by the postal service department of
United Kingdom. The first online banking service in United States was introduced, in
October 1994. The service was developed by Stanford Federal Credit Union, which is a
financial institution. The online banking services are becoming more and more prevalent due
to the well-developed systems.

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 The Indian Scenario

“The entry of Indian banks into Internet Banking” Tremendous growth of Internet
during the mid-nineties prompted banks to utilize Internet as a medium for offering banking
services. Using Internet Banking, banks allow their customers to perform banking
transactions through their web site in a secure way. However, not many studies have been
conduced to evaluate if the customers in India utilize “Internet Banking” channel properly.
Internet banking, both as a medium of delivery of banking services and as a strategic
tool for business development, has gained wide acceptance internationally and is fast
catching up in India with more and more banks entering the fray. India can be said to be on
the threshold of a major banking revolution with net banking having already been unveiled. A
recent questionnaire, to which 46 banks responded, has revealed that at present, 11 banks in
India are providing Internet banking services at different levels, 22 banks propose to offer
Internet banking in near future while the remaining 13 banks have no immediate plans to
offer such facility.
In India, approximately one percent of high and middle-income group banking
customers conducted banking on the Internet in 2000 compared to 5 to 6 percent in Singapore
and South Korea. In 2001, a Reserve Bank of India survey revealed that more than 20 major
banks either were offering internet-banking services at various levels or planned to do so in
the near future. Some of the private banks included ICICI Bank, HDFC Bank, IDBI Bank,
Citibank, Global Trust Bank, Bank of Punjab and UTI Bank. In the same year, out of an
estimated 0.9 million Internet user base, approximately 17 percent were reported to be
banking on the Internet.
At present, the total Internet users in the country are estimated at 9lakh. However, this
is expected to grow exponentially to 90lakh by 2003. Only about 1% of Internet users did
banking online in 1998. This increased to 16.7% in March 2000.* the growth potential is,
therefore, immense. Further incentives provided by banks would dissuade customers from
visiting physical branches, and thus get ‘hooked’ to the convenience of armchair banking.
The facility of accessing their accounts from anywhere in the world by using a home
computer with Internet connection, is particularly fascinating to Non-Resident Indians and
High Net worth Individuals having multiple bank accounts.
Costs of banking service through the Internet form a fraction of costs through
conventional methods. Rough estimates assume teller cost at Re.1 per transaction, ATM
transaction cost at 45paise, phone banking at 35paise, debit cards at 20paise and Internet

13
banking at 10paise per transaction. The cost-conscious banks in the country have therefore
actively considered use of the Internet as a channel for providing services. Fully
computerized banks, with better management of their customer base are in a stronger position
to cross-sell their products through this channel. The online population has increased from
just 500,000 in 1998 to 5 million in 2000. By 2015, the online population is expected to reach
70 million. IT services is a $1.5 billion industry in India growing at a rate of 55% per annum.
Banks providing Internet banking services have been entering into agreements with their
customers setting out the terms and conditions of the services. The terms and conditions
include information on the access through user-id and secret password, minimum balance and
charges, authority to the bank for carrying out transactions performed through the service,
liability of the user and the bank, disclosure of personal information for statistical analysis
and credit scoring also, non-transferability of the facility, notices and termination, etc. These
services are being initiated by banks like ICICI Bank Ltd., Citibank, Global Trust Bank Ltd.,
UTI Bank Ltd., Bank of Citibank Bank of Madura Ltd., Federal Bank Ltd., etc.
Indian Government has introduced the Information Technology Bill, which has
already been notified in October 2000. Section 72 of the Information Technology Act, 2000
casts an obligation of confidentiality against disclosure of any electronic
record, register, correspondence and information, except for certain purposes and violation of
this provision is a criminal offence. Notification for appointment of Authorities to certify
digital signatures, ensuring confidentiality of data, is likely to be issued in the coming
months. Comprehensive enactments like the Electronic Funds Transfer Act in U.K. and data
protection rules and regulations in the developed countries are in place abroad to prevent
unauthorized access to data, malafide or otherwise, and to protect the individual’s rights
of privacy. The legal issues are, however, being debated in our country and it is expected that
some headway will be made in this respect in the near future
The banking industry is expected to be a leading player in internet-business. While the
banks in developed countries are working primarily via Internet as non-branch banks, banks
in the developing countries use the Internet as an information delivery tool to improve
relationship with customers. In early 2001, approximately 60 percent of internet -business in
the UK was concentrated in the financial services sector, and with the expected 10-fold
increase of the British internet -business market by 2004, the share of the financial services
will further increase. Around one fifth of Finish and Swedish bank customers are banking
online, while in the US, online banking is growing at an annual rate of 60 percent and the
numbers of online accounts are expected to reach 15 million by 2003.
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 Banks have established an Internet presence with various objectives. Most of them are
using the Internet as a new distribution channel. Financial services, with the use of Internet,
may be offered in an equivalent quantity with lower costs to the potential customers. There
may be contacts from each corner of the world at any time of day or night. This means that
banks may enlarge their market without opening new branches. The banks in the US are
using the Web to reach opportunities in three different categories: to market information, to
deliver banking products and services, and to improve customer relationship.

In 2001, over 50 percent of the banks in the US were offering internet -banking
services. However, large banks appeared to have a clear advantage over small banks in the
range of services they offered. Some banks in the US were targeting their Internet strategies
towards business customers. Apart from affecting the way customers received banking
services; internet -banking was expected to influence the banking industry structure. The
economics of internet -banking was expected to favor large banks because of economies of
scale and scope, and the ability to advertise heavily. Moreover, internet -banking offered
entry and expansion opportunities that small banks traditionally lacked.

The major factor restricting growth of internet -banking is security, in spite of

several countries being well connected via Internet. Access to high-quality internet
-banking products is an issue as well. Majority of banks in Asia are just offering basic
services compared with those of developed countries. Still, internet -banking seems to have
a future in Asia. According to McKinsey survey, internet -banking will succeed if the basic
features, especially bill payment, are handled well. Bill payment was the most popular
feature, cited by 40 percent of respondents of the survey.

Growth in Internet Banking

Numerous factors including competitive cost, customer service, and demographic

considerations – are motivating banks to evaluate their technology and assess their electronic
commerce and Internet banking strategies. The challenge is to make sure the savings from
internet banking technology more than offset the costs and risks associated with conducting
business in cyberspace. Some of the market factors that may drive a bank’s strategy towards
internet banking include the following:

15
• Competition
The competitive pressure is the chief driving force behind increasing use of
internet banking technology, ranking ahead of cost reduction and revenue enhancement.
Banks see internet banking as a way to keep existing
customers and attract new ones to the bank.
• Cost efficiencies
Banks can deliver banking services on the internet at transaction costs far lower
than traditional ways. The actual costs to execute a transaction will vary depending on
the delivery channel used. These costs are expected to continue to decline.
• Geographical Reach
Internet Banking allows expanded customer contact through increased
geographical reach and lower cost of delivery channels. In fact, some banks are doing
business exclusively via the internet – they do not have traditional banking offices and
only reach their customers online.
• Branding
Relationship building is a strategic priority for most banks. Internet banking
technology and products can provide a means for banks to develop and maintain an
ongoing relationship with their customers by offering easy access to a broad array of
products and services. By capitalizing on brand identification and by providing a broad
array of financial services, banks hope to build customer loyalty, and enhance repeat
businesses.
Customer Demographics

Internet banking allows banks to offer a wide array of options to their banking
customers. Some customers will rely on traditional branches to conduct their banking
business. Other customers are early adopters of new technologies that arrive in the
marketplace. The challenge to banks is to understand their customer base and find the
right mix of delivery channels to deliver products and services profitably to their various
market segments. As use of the internet continues to expand, more banks are using the
web to offer products and services or otherwise enhance communications with
consumers. The internet offers the potential for safe, fast, and convenient new ways to
shop for financial services and conduct banking business, any day, any time.

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 TYPES OF RISKS ASSOCIATED WITH INTERNET BANKING

Operational Risk: -
 Operational risk, also referred to as transactional risk is the most common form of risk
associated with internet banking.
 It takes them from of inaccurate processing of transactions, non-enforceability of
contracts, compromises in data integrity, data privacy and Confidentiality,
unauthorized access / intrusion to bank’s systems and transaction, etc.
 Such risks can arise out of weaknesses in design, implementation and monitoring of
banks information system.
 Besides inadequacies in technology, human factors like negligence by customers and
employees, fraudulent activity of employees and crackers/hackers, etc. can become
potential source of operational risk.
Security Risk: -
 Security risk arises because of unauthorized access to a bank’s critical information
stores like accounting system, risk management system, portfolio management
system, etc.
 Other related risks are loss of reputation, infringing customers’ privacy and its legal
implications, etc.
 Attackers could be hackers, unscrupulous vendors, disgruntled employee or even pure
thrill seekers.
 In addition to external attacks banks are exposed to security risk from internal sources
e.g. employee fraud. Employee being familiar with different systems and their
weaknesses become potential security threats in a loosely controlled environment.
They can manage to acquire the authentication data in order to access the customer
accounts causing losses to the bank.
 Unless specifically protected, all data/ information transfer over the internet can be
monitored or read by unauthorized persons.
System architecture and design: -
 Banks face the risk of wrong choice of technology, improper system design and
inadequate control processes.
 Numerous protocols are used for communication across internet. Each protocol is
designed for specific types of data transfer.

17
 A system allowing communications with all protocols, say HTTP (Hyper Text
Transfer Protocol), FTP (File Transfer Protocol), telnet, etc. is more prone to attack
than one designed to permit say, only HTTP.
 Many banks rely on outside service providers to implement, operate and maintain
their e-banking system.
 Security related operational risk include access control, use of firewalls,
cryptographic techniques, public key encryption, digital signature, etc.
Reputation Risk: -
 Reputation risk is the risks of getting significant negative public opinion, which may
result in a critical loss of funding or customers. Such risks arise from actions, which
cause major loss of the public confidence in the banks’ ability to perform critical
functions or impair bank-customer relationship. It may be due to banks’ own action or
due to third parties action.
 The main reasons for this risk may be system or product not working to the
expectations of the customers, significant security breach (both due to internal and
external attack), inadequate information to customers about product use and problem
resolution procedures, significant problems with communication networks that impair
customers’ access to their funds or account information especially if, there are, no
alternative means of account access.
Legal Risk: -
 Legal risk arises from violation of, or non-conformance with laws, rules, regulations,
or prescribed practices, or when the legal rights and obligations of parties to a
transaction are not well established.
 A customer inadequately informed about his rights and obligations, may not take
proper precautions in using Internet banking products or services, leading to disputed
transactions, unwanted suits against the bank or other regulatory sanctions.
Money Laundering Risk: -
 As internet-banking transactions are conducted remotely, banks may find it difficult to
apply traditional method for detecting and preventing undesirable criminal activities.
Application of money laundering rules may also be inappropriate for some forms of
electronic payments.
 To avoid this, banks need to design proper customer identification and screening
techniques, develop audit trails, conduct periodic compliance reviews, and frame
policies in internet transactions.
18
 Cross-Border Risks: -
 Internet banking is based on technology that, by its very nature, is designed to extend
the geographic reach of banks and customers. Such market expansion can extend
beyond national borders. This causes various risks.
 Such considerations may expose banks to legal risks associated with noncompliance
of different national laws and regulations, including consumer protection laws, record
keeping and reporting requirements, privacy rules and money laundering laws.
 The foreign-based service provider or foreign participants in internet banking are
sources of country risk to the extent that foreign parties become unable to fulfill their
obligations due to economic, social or political factors.
Strategic Risk: -
 For reducing such risk, banks need to conduct proper survey, consult experts from
various fields, establish achievable goals and monitor performance.
 In addition, they need to analyze the availability and cost of additional resources,
provision of adequate supporting staff, proper training of staff and adequate insurance
coverage.
Other Risk: -
Traditional banking risks such as credit risk, liquidity risk, interest rate risk and market risk
are also present in internet banking.
These risks are intensified due to the very nature of internet banking on account of use of
electronic channels as well as absence of geographical limits.
Credit risk: Is the risk that a counterparty will not settle an obligation for full value, either
when due or at any time thereafter. Banks may not be able to properly evaluate the
creditworthiness of the customer while extending credit through remote banking procedures,
which could enhance the credit risk.
Another facility of internet banking is electronic money. It brings various types of risks
associated with it. If a bank purchases e-money from an issuer in order to resell it to a
customer, it exposes itself to credit risk in the event of the issuer defaulting on its obligation
to redeem electronic money.
Liquidity risk: It is important for a bank engaged in electronic money transfer activities that it
ensures that funds are adequate to cover redemption and settlement demands at any particular
time. Failure to do so, besides exposing the bank to liquidity risk, may even give rise to legal
action and reputation risk.

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REGULATORY TOOLS TO OVERCOME CHALLENGES

There are four key tools that regulators need to focus on to address the new
challenges posed by the arrival of internet -banking.

Adaptation: In light of how rapidly technology is changing and what the changes mean for
banking activities, keeping regulations up to date has been, and continues to be, a far-reaching,
time-consuming, and complex task. In May 2001, the Bank for International Settlements
issued its "Risk Management Principles for internet banking," which discusses how to extend,
adapt, and tailor the existing risk-management framework to the electronic banking setting.

Legalization: New methods for conducting transactions, new instruments, and new service
providers will require legal definition, recognition, and permission. For example, it will be
essential to define an electronic signature and give it the same legal status as the handwritten
signature.

Harmonization: International harmonization of electronic banking regulation must be a top

priority. This means intensifying cross-border cooperation between supervisors and
coordinating laws and regulatory practices internationally and domestically across different
regulatory agencies. The problem of jurisdiction that arises from "borderless" transactions is,
as of this writing, in limbo.

Integration: This is the process of including information technology issues and their
accompanying operational risks in bank supervisors' safety and soundness evaluations. In
addition to the issues of privacy and security, for example, bank examiners will want to know
how well the bank's management has elaborated its business plan for electronic banking.

In the era of globalization each and every sector faced the stiff competition from their
rivals and world also converted into the flat from the globe. After the policy of liberalization
and RBI initiatives to take the step for the private sector banks, more and more changes are
taking the part into it. That are create competition between the private sector banks and public
sector bank. Private sector banks are today used the latest technology for the different
transaction of day to day banking life. As we know that Information Technology plays the
vital role in the each and every industry and gives the optimum return from the limited
resources.

20
Product and Services Offered:-

 Banks in India are at different stages of the web-enabled banking cycle. Initially, a
bank, which is not having a web site, allows its customer to communicate with it
through an e-mail address’ communication, is limited to a small number of branches
and offices which have access to this e-mail count.

 With gradual adoption of Information Technology, the bank puts up a web site that
provides general information on deposits products, application forms for downloading
and e-mail option for enquiries and feedback.

 Banks provide information on their websites about NRI and other services. Customers
are required to fill in applications on the Net and can later receive loans or other
products requested for at their local branches.

 A few banks provide the customer to enquire into his demat account (security/shares)
holding details, transaction details and status of instructions given by him. These web
sites still do not allow online transactions for their customers.

 Some of the banks permit customers to interact with them and transact electronically
with them. Such services include request for opening of accounts, requisition for
cheque books, stop payment of cheques, viewing and printing statements of accounts,
movement of funds between accounts within the same bank, querying on status or
requests, instructions for opening of Letter of Credit and Bank Guarantees, etc.

 These services are being initiated by banks like ICICI Bank Ltd., Citibank, Global
Trust Bank Ltd., AXIS Bank Ltd., IndusInd Bank, Citibank, Bank of Madura Ltd.,
Federal Bank Ltd., etc.

 Some of the more aggressive players in this area such as ICICI Bank Ltd., HDFC
Bank Ltd., AXIS Bank Ltd., IDBI Bank, HSBC Bank, IndusInd Bank, Global Trust
Bank Ltd., and Bank of Punjab Ltd., offer the facility of receipt, review and payment
of bills online.

 HDFC Bank Ltd. has made e-shopping online and real time with the launch of its
payment gateway.

 Banks providing internet banking services have been entering into agreements with
their customers setting out the terms and conditions of the services.

 The terms and conditions include information on the access through user-ID and
secret password, minimum balance and charges, authority to the bank for carrying out
transactions performed through the service, liability of the user and the bank,
disclosure of personal information for statistical analysis and credit scoring also, etc.

21
 Banking services through internet-

There are basically, 3 E- Banking service Levels provided by banks. These are discussed as
below:-

i. The Basic Level Service is the Banks’ web sites which disseminate information on
different products and services offered to customers and members of public in
general. It may receive and reply to customer’s queries through e-mail,

ii. In the next level are Simple Transactional Web sites which allows customers to
submit their instructions, applications for different services, queries in their account
balances, etc. but do not permit any fund-based transactions on their accounts,

iii. The third level of Internet banking service are offered by Fully Transactional Web
sites which allow the customers to operate on their accounts for transfer of funds,
payment of different bills, subscribing to other products of the bank and to transact
purchase and sale of securities, etc. The above forms of Internet banking service the
customer or by new banks, who deliver banking service primarily through Internet or
other electronic delivery channels as the value added services. Some of these banks
are known as ‘Virtual’ banks or ‘Internet only’ banks and may not have physical
presence in a country despite offering different banking services.

22
 INTRODUCTION TO THE INDUSTRY

A bank is a financial institution and a financial intermediary that accepts deposits and
channels those deposits into lending activities, either directly by loaning or indirectly
through capital markets. A bank is the connection between customers that have capital
deficits and customers with capital surpluses. Due to their influence within a financial
system and an economy, banks are generally highly regulated in most countries. Most banks
operate under a system known as fractional reserve banking where they hold only a
small reserve of the funds deposited and lend out the rest for profit. They are generally
subject to minimum capital requirements which are based on an international set of capital
standards, known as the Basel Accords.
The oldest bank still in existence is Monte dei Paschi di Siena, headquartered
in Siena, Italy, which has been operating continuously since 1472. It is followed
by Berenberg Bank of Hamburg (1590) and Sveriges Riksbank of Sweden (1668). Banking in
its modern sense evolved in rich cities of Renaissance Italy, such
as Florence, Venice and Genoa. In the history of banking, a number of banking dynasties—
among them.

Origin of the word:

The word bank was borrowed in Middle English from Middle French banque, from
Old Italian banca, from Old High German banc, bank "bench, counter". Benches were used as
desks or exchange counters during the Renaissance by Florentine bankers, who used to make
their transactions atop desks covered by green tablecloths.

Another possible origin of the word is from the Sanskrit words (ब्यय) 'byaya'
(expense) and 'onka' (calculation) = byaya-onka. This word still survives in Bangla, which is
one of Sanskrit's child languages. ববব্যায + অঙ = ববব্যাঙ . Such expense calculations were the
biggest part of mathematical treatises written by Indian mathematicians as early as 500 B.C.

Banking in India in the modern sense originated in the last decades of the 18th
century. The first banks were The General Bank of India, which started in 1786, and Bank of
Hindustan, which started in 1770; both are now defunct. The oldest bank still in existence in

23
India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which
almost immediately became the Bank of Bengal. This was one of the three presidency banks,
the other two being the Bank of Bombay and the Bank of Madras, all three of which were
established under charters from the British East India Company. For many years the
presidency banks acted as quasi-central banks, as did their successors. The three banks
merged in 1921 to form the Imperial Bank of India, which, upon India's independence,
became the State Bank of India in 1955.

History: In ancient India there is evidence of loans from the Vedic period (beginning 1750
BC). Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in
use, which was an order on a banker desiring him to pay the money of the note to a third
person, which corresponds to the definition of a bill of exchange as we understand it today.
During the Buddhist period, there was considerable use of these instruments. Merchants in
large towns gave letters of credit to one another.

Colonial era:
During the colonial era merchants in Calcutta established the Union Bank in 1839, but it
failed in 1840 as a consequence of the economic crisis of 1848-49. The Allahabad Bank,
established in 1865 and still functioning today, is the oldest Joint Stock bank in India, it was
not the first though. That honor belongs to the Bank of Upper India, which was established in
1863, and which survived until 1913, when it failed, with some of its assets and liabilities
being transferred to the Alliance Bank of Simla.
Foreign banks too started to appear, particularly in Calcutta, in the 1860s.
The Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another
in Bombay in 1862; branches in Madras and Pondicherry, then a French possession,
followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading
port in India, mainly due to the trade of the British Empire, and so became a banking center.
The first entirely Indian joint stock bank was the Oudh Commercial Bank,
established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank,
established in Lahore in 1895, which has survived to the present and is now one of the largest
banks in India. Around the turn of the 20th Century, the Indian economy was passing through
a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and
the social, industrial and other infrastructure had improved. Indians had established small
banks, most of which served particular ethnic and religious communities.
24
 The period between 1906 and 1911, saw the establishment of banks inspired
by the Swadeshi movement. The Swadeshi movement inspired local businessmen and
political figures to found banks of and for the Indian community. A number of banks
established then have survived to the present such as Bank of India, Corporation Bank, Indian
Bank, Bank of Baroda, Canara Bank and Central Bank of India. The favor of Swadeshi
movement lead to establishing of many private banks in Dakshina Kannada and Udupi
district which were unified earlier and known by the name South Canara ( South Kanara )
district. Four nationalized banks started in this district and also a leading private sector bank.
Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".

Indian banking industries

The Indian banking market is growing at an astonishing rate, with Assets expected to reach
US$1 trillion by 2010. An expanding Economy, middle class, and technological
innovations are all Contributing to this growth.
The country’s middle class accounts for over 320 million people. In correlation with the
growth of the economy, rising income levels, increased standard of living, and affordability
of banking products are promising factors for continued expansion.

The Indian banking Industry is in the middle of an IT revolution, focusing on the

expansion of retail and rural banking. Players are becoming increasingly customer - centric
in their approach, which has resulted in innovative methods of offering new banking
products and services. Banks are now realizing the importance of being a big player and

25
are beginning to focus their attention on mergers and acquisitions to take advantage of
economies of scale and/or comply with Basel II regulation. “Indian banking industry
assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater
infusion of foreign capital,” says Prathima Rajan, analyst in Celent's banking group and
author of the report.“The banking industry should focus on having a small number of large
players that can compete globally rather than having a large number of fragmented players."

Upcoming Foreign banks in India

By 2009 to 2010 few more names is going to be added in the list of foreign banks in India.
This is as an aftermath of the sudden interest shown by Reserve Bank of India paving
roadmap for foreign banks in India greater freedom in India. Among them is the world's best
private bank by Euro Money magazine, Switzerland's UBS.

The following are the list of foreign banks going to set up business in India:-

 Royal Bank of Scotland


 Switzerland's UBS

 US-based GE Capital

 Credit Suisse Group

 Industrial and Commercial Bank of China

During the First World War (1914–1918) through the end of the Second World War (1939–
1945), and two years thereafter until the independence of India were challenging for Indian
banking. The years of the First World War were turbulent, and it took its toll with banks
simply collapsing despite the Indian economy gaining indirect boost due to war-related
economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in
the following table:

Years Number of banks Authorised capital Paid-up Capital

26
 that failed (Rs. Lakhs) (Rs. Lakhs)
1913 12 274 35
1914 42 710 109
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1

Post-Independence:
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation, and the Industrial Policy Resolution adopted
by the government in 1948 envisaged a mixed economy.

The Reserve Bank of India, India's central banking authority, was established in April
1935, but was nationalized on January 1, 1949 under the terms of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948 (RBI, 2005b). In 1949, the Banking Regulation Act
was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and
inspect the banks in India".
The Banking Regulation Act also provided that no new bank or branch of an existing bank
could be opened without a license from the RBI, and no two banks could have common
directors.
Nationalization in the 1960s

Banks Nationalization in India: Newspaper Clipping, Times of India, July 20, 1969

27
Despite the provisions, control and regulations of Reserve Bank of India, banks in India
except the State Bank of India or SBI, continued to be owned and operated by private
persons. By the 1960s, the Indian banking industry had become an important tool to facilitate
the development of the Indian economy. At the same time, it had emerged as a large
employer, and a debate had ensued about the nationalization of the banking industry. Indira
Gandhi, then Prime Minister of India, expressed the intention of the Government of India in
the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts
on Bank Nationalization." The meeting received the paper with enthusiasm.
Liberalization in the 1990s: In the early 1990s, the then Narasimha Rao government
embarked on a policy of liberalization, licensing a small number of private banks. These
came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the
first of such new generation banks to be set up), which later amalgamated with Oriental Bank
of Commerce, UTI Bank (since renamed Axis Bank),ICICI Bank and HDFC Bank. This
move, along with the rapid growth in the economy of India, revitalized the banking sector in
India, which has seen rapid growth with strong contribution from all the three sectors of
banks, namely, government banks, private banks and foreign banks.
Structure of banking sector in India:

Ministry of Finance

RBI

Scheduled Banks

Commercial Banks Cooperative Banks

Public Private Foreign Regional Urban State

sector sector Banks Rural Cooperative Cooperative
Banks Banks Banks

Reserve Bank of India:

28
The RBI is India's central bank. The Reserve Bank of India was established on April 1, 1935
in accordance with the provisions of the Reserve Bank of India Act, 1934. RBI acts as a
banker to the Government and Banks. The Central Bank maintains record of Government
revenue and expenditure under various heads. It maintains deposit accounts of all other banks
and advances money to other banks, when needed. Another important function of the Central
Bank is the issuance of currency notes, regulating their circulation in the country by different
methods.
Scheduled Banks:
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934
are scheduled banks. These banks comprise Scheduled Commercial Banks and Scheduled
Cooperative Banks. The type of banks comes under these Scheduled Commercial Banks and
Scheduled Cooperative Banks can be seen in the above figure. All most all banks are
Scheduled banks in India.

Commercial Banks:
Commercial banks may be defined as, any banking organization that deals with the deposits
and loans of business organizations. Commercial banks issue bank checks and drafts, as well
as accept money on term deposits. Commercial banks also act as moneylenders, by way of
installment loans and overdrafts. Commercial banks also allow for a variety of deposit
accounts, such as checking, savings, and time deposit. These institutions are run to make a
profit and owned by a group of individuals.

Public Sector Banks:

These are banks where majority stake is held by the Government of India. Examples of public
sector banks are: SBI, Bank of India, Canara Bank, etc.

Private Sector Banks:

These are banks majority of share capital of the bank is held by private individuals. These
banks are registered as companies with limited liability. Examples of private sector banks are:
ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks:
29
These banks are registered and have their headquarters in a foreign country but operate their
branches in our country. Examples of foreign banks in India are: HSBC, Citibank, Standard
Chartered Bank, etc.
Regional Rural Banks:
Regional Rural Banks were established under the provisions of an Ordinance promulgated on
the 26th September 1975 and the RRB Act, 1976 with an objective to ensure sufficient
institutional credit for agriculture and other rural sectors. The area of operation of RRBs is
limited to the area as notified by GoI covering one or more districts in the State. RRBs are
jointly owned by GoI, the concerned State Government and Sponsor Banks (27 scheduled
commercial banks and one State Cooperative Bank); the issued capital of a RRB is shared by
the owners in the proportion of 50%, 15% and 35% respectively. Prathama bank is the first
Regional Rural Bank in India located in the city Moradabad in Uttar Pradesh.

Co-operative Banks:
A co-operative bank is a financial entity which belongs to its members, who are at the same
time the owners and the customers of their bank. Co-operative banks are often created by
persons belonging to the same local or professional community or sharing a common interest.
Co-operative banks generally provide their members with a wide range of banking and
financial services (loans, deposits, banking accounts, etc). They provide limited banking
products and are specialists in agriculture-related products. Cooperative banks are the
primary financiers of agricultural activities, some small-scale industries and self-employed
workers. Co-operative banks function on the basis of "no-profit no-loss".
Anyonya Co-operative Bank Limited (ACBL) is the first co-operative bank in India located
in the city of Vadodara in Gujarat.

COMPANY PROFILE

30
Bank Name: State Bank of India

Branch Name: MUZAFFARNAGAR

Branch Code: 112743

Address: RAILWAY ROAD

City: MUZAFFARNAGAR

State: Uttar Pradesh

Phone: 0131-2408091

Micr Code: 582002004

IFSC Code: SBIN0000685

RTGS: YES

Core banking: Available

Website: http://www.sbi.co.in

Internet Banking Site https://www.onlinesbi.com

A) Background and Inception:

31
State Bank of India (SBI) is banking and financial services based company in India. It is
a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2012,
it had assets of US$360 billion and 14,119 branches, including 173 foreign offices in 37
countries across the globe making it the largest banking and financial services company in
India.
State Bank of India (SBI) is the nation's largest and oldest bank. Tracing its roots back some
200 years to the British East India Company (and initially established as the Bank of Calcutta
in 1806) also owns majority stakes in five associate banks. The bank has other units devoted
to capital markets, fund management, factoring and commercial services, credit cards,
insurance, and brokerage services. The Reserve Bank of India owns about 60% of State Bank
of India.
History:
The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of
Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of
Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July
1843). All three Presidency banks were incorporated as joint stock companies and were the
result of the royal charters (a formal document issued by a British monarch as letters patent,
granting a right or power to an individual or a body corporate). These three banks received
the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they
retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated
on 27 January 1921, and the re-organized banking entity took as its name Imperial Bank of
India. The Imperial Bank of India remained a joint stock company.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve
Bank of India, which is India's central bank, acquired a controlling interest in the Imperial
Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India.
The government of India recently acquired the Reserve Bank of India's stake in SBI so as to
remove any conflict of interest because the RBI is the country's banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act,
which made eight state banks associates of SBI.

Current Board of Directors:

32
After the end of Om. Prakash Bhatt's reign as SBI chairman on 31 March 2011, the post was
taken over by Pratip Chaudhuri, who is the former deputy managing director of the
international division of SBI. As of 4 August 2011, there are twelve members in the SBI
board of directors.

Associate Banks:
SBI has five associate banks; all use the same logo of a blue circle and all the associates use
the "State Bank of" name, followed by the regional headquarters:
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore

B) Nature of the business carried:

Commercial banks are an organization which normally performs certain financial
transactions. It performs the twin task of accepting deposits from members of public and
make advances to needy and worthy people from the society. When banks accept deposits its
liabilities increase and it becomes a debtor, but when it makes advances its assets increases
and it becomes a creditor. Banking transactions are socially and legally approved. It is
responsible in maintaining the deposits of its account holder

C) Vision, Mission and Quality Policy:

33
Vision statement:
My SBI
My Customer first.
My SBI: first in customer satisfaction

Mission statement:
We will be prompt, polite and proactive with our customers.
We will speak the language of young India.
We will create products and services that help our customers achieve their goals.
We will go beyond the call of duty to make our customers feel valued.
We will be of service even in the remotest part of our country.
We will offer excellence in services to those abroad as much as we do to those in India.
We will imbibe state-of-the-art technology to drive excellence.

Values:
We will always be honest, transparent and ethical.
We will respect our customers and fellow associates.
We will be knowledge driven.
We will learn and we will share our learning.
We will never take the easy way out.
We will do everything we can to contribute to the community we work in.
We will nurture pride in India.

D) Products and Services Profile:

34
SBI offers Corporate and Retail Internet Banking Products and Other Value Added Services

Products Services
Khata Access to multiple users
Khata Plus Account view / Statement
Saral Funds Transfer
Vyapaar Third party funds transfer (RTGS/NEFT)
Vistaar Demand Draft request
Electronic Vendor Finance Utility Bill Payment
Electronic Dealer Finance Bulk transaction through file upload
Direct Debit Direct and indirect tax payment
E-Collection SMS/Email alerts

Products:
Khata:
Derive an advantage over others; advantage of accessing your accounts 24 X 7.
Khata enables you to access your account information anywhere anytime.
You will have the following advantages:
 Enquiry rights on the accounts
 Facility to view account information and download account statement of your
account.
 Suitable for single user operated accounts.

Khata Plus:

35
Derive an added advantage over others by getting multiple accesses to your accounts 24 X 7.
Khata Plus enables multiple people in your business to access your account information
anywhere anytime.

Saral:
Single user operated, user friendly and simple. Transaction rights on the accounts. Facility to
view account information and download account statement of your account.
Facility to transfer your funds to:
SBI accounts(other than your own accounts) Consolidated limit per day Rs.5.00 Lacs Other
Bank Accounts (RTGS/NEFT) --- Consolidated limit per day Rs.5.00 Lacs
Merchant Payments --- Consolidated limit per day Rs.5.00 Lacs

Vyapaar:
Exercise the privilege to transact over the internet, make payments the cyber way, conduct
business in style. Equip with Vyapaar and facilitate your business needs.

Vistaar:
Freedom to operate your business at any geographical location from wherever you desire.
Freedom to take urgent financial decisions from any situation. Freedom to empower your
people to conduct business the modern way yet within the framework laid down by you.
Freedom from branch dependency.

Electronic Vendor Finance:

Electronic Vendor Financing Scheme (e-VFS ) and Electronic Dealer Financing Scheme (e-
DFS) State Bank of India introduces Supply Chain Finance by leveraging its state of the art
technology for the convenience of the customers. SCF will strengthen the relationship of SBI
with the Corporate World by financing their supply chain partners.
Electronic Dealer Finance:
Electronic Vendor Financing Scheme (e-VFS ) and Electronic Dealer Financing
Scheme (e-DFS) State Bank of India introduces Supply Chain Finance by leveraging its state
of the art technology for the convenience of the customers. SCF will strengthen the
relationship of SBI with the Corporate World by financing their supply chain partners.
Direct Debit:
36
 Direct debit is a facility given to Corporate (Suppliers) having Vistaar facility and
supplying goods to their Dealers (Dealers need not be availing INB facility) whereby the
Corporate (Supplier) can directly debit the accounts of their dealers maintained at SBI
branches at different locations. In this facility the Supplier and the Bank will enter in to a
bipartite agreement, based on which, the Dealer will provide a mandate to the supplier for
debiting his account up to a specific limit.
Services:
Account view / Statement:
OnlineSBI can generate an account statement for a date range for any of your accounts. The
statement includes transaction details, opening, closing and accumulated balance in the
account.
Funds Transfer:
 You can now avail a bouquet of funds transfer services through Internet banking
 Transfer funds within your own accounts
 Transfer funds to third party account held in the same bank
 Make an Inter bank funds transfer to any account held in any bank including State
Bank Group
 Pay any VISA credit card bill
 Transfer funds to religious and charitable institutions
 Record standing instructions to transfer a fixed amount at a scheduled frequency for a
period not exceeding one year
 Transfer funds to NRE PIS accounts to facilitate online trading
 Third party funds transfer (RTGS/NEFT)
Inter Bank Transfer: enables electronic transfer of funds from the account of the remitter in
one Bank to the account of the beneficiary maintained with any other Bank branch. There are
two systems of Inter Bank Transfer - RTGS and NEFT. Both these systems are maintained by
Reserve Bank of India.

Demand Draft request:

OnlineSBI enables customers to issue demand drafts online. Customer has the option to
collect the draft from branch or give his mandate to dispatch the draft by courier to the
beneficiary.
Bill Payment:

37
Many categories of Billers are available for payment using OnlineSBI. For e.g. Credit Card,
Insurance, Telephone Payment etc.

Utility Bill Payment:

SBI e-PAY - A simple and convenient service for receiving and paying your bills online
 No more late payments
 No more queues
 No more hassles of depositing cheques
 Direct and indirect tax payment

Direct Taxes (OLTAS):

OnlineSBI provides the facility to pay direct taxes online which includes payment of TDS,
Income Tax, Corporation Tax, Security Transactions Tax, Hotel Receipts Tax, Estate Duty,
Interest Tax, Wealth Tax, Expenditure Tax, Gift Tax, Cash Transaction Tax and Fringe
Benefits Tax. As a tax payer, you need to have a bank account enabled for net banking facility
with transaction rights in anyone of our branches.
Indirect Taxes (CBEC):
OnlineSBI provides the facility to pay Indirect taxes online. As a tax payer, you need to have
a bank account enabled for net banking facility with transaction rights in anyone of our
branches. Please find below the procedure for making the payment.

Indirect Taxes (Customs):

To pay Indirect Taxes (Customs) through the internet:

Offline Products/Services:

38
PRODUCTS/SERVICE PROFILE

SBI Term Deposits SBI Loan For Pensioners

SBI Recurring Deposits Loan Against Mortgage Of Property
SBI Housing Loan Loan Against Shares & Debentures
SBI Car Loan Rent Plus Scheme
SBI Educational Loan Medi-Plus Scheme
SBI Personal Loan Rates Of Interest
SBI Current account Savings plus account
SBI Savings bank account Basic banking ‘no frills account’
Special term deposits Premium savings account
Multi option deposits scheme Demat account

PERSONAL BANKING- State bank of India offers a wide range of services in the Personal
Banking Segment which are indexed here.

GOLD BANKING
Retail sale of gold coin Gold deposits scheme(GDS)
FAQ-Gold deposits scheme Sale of gold and gold metal loans

SERVICES

Listed on the left are Services, SBI offers to its customers.

 DOMESTIC TREASURY
 BROKING SERVICES
 REVISED SERVICE CHARGES
 ATM SERVICES
 INTERNET BANKING
 STATE BANK MOBICASH
 E-PAY
 E-RAIL
 RBIEFT
 SAFE DEPOSIT LOCKER
 MICR CODES
 FOREIGN INWARD REMITTANCES

39
 MOBILE BANKING

State Bank Freedom – Your Mobile Your Bank

Away from home, balance enquiries can be made and/or money sent to the loved ones or bills
can be paid anytime 24x7!!! That is what State Bank FreedoM offers -convenient, simple,
secure, anytime and anywhere banking.

1. Mobile Banking Service over Application/ Wireless Application Protocol (WAP)

The service is available on java enabled /Android mobile phones (with or without GPRS)
where the user is required to download the application on to the mobile handset. The service
can also be availed via WAP on all phones (java/non java) with GPRS connection.

The following functionalities are available:

 Funds transfer (within and outside the bank)

 Interbank Mobile Payment Services (IMPS):

 Enquiry services (Balance enquiry/ Mini statement)

 Cheque book request

 Demat Enquiry Service

 Bill Payment (Utility bills, credit cards, Insurance premium), Donations,

Subscriptions

 Mobile Top up

 M Commerce (Top up of Tatasky, BigTV, SunDirect, DishTV, DigitalTV and

Videocon d2h connections, SBI life insurance premium)

2. Mobile Banking Service over SMS: The service is available on all phones (java/non java)
with/without GPRS connection. No need to download the application. Ordinary SMS charges
are applicable.

The following functionalities are available:

• Enquiry Services (Balance Enquiry/Mini Statement)

• Mobile Top up
• DTH Top up/ recharge
• IMPS- Mobile to Mobile Transfer
• Change MPIN

40
 • As a matter of abundant precaution, Customers are requested to delete all the
messages sent to the number 9223440000, once the response for their request has
been received.

3. Mobile Banking Service over USSD (Unstructured Supplementary Service Data)

The service is available on all phones (java/non java) with/without GPRS connection. No
need to download the application.

The following functionalities are available:

• Enquiry Services (Balance Enquiry/Mini Statement)

• Mobile Top up
• Funds Transfer (within Bank)

41
 ATM SERVICES
STATE BANK NETWORKED ATM SERVICES

State Bank offers you the convenience of over 26,000 ATMs in India, the largest network in
the country and continuing to expand fast! This means that you can transact free of cost at the
ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the
Associate Banks - namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State
Bank of Mysore, State Bank of Patiala, and State Bank of Travancore) and wholly owned
subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cum-
Debit (Cash Plus) card.

KINDS OF CARDS ACCEPTED AT STATE BANK ATMs

Besides all cards of State Bank of India, State Bank ATM-Cum-Debit Card and State Bank
International ATM-Cum-Debit Cards following cards are also accepted at State Bank ATMs:

1) State Bank Credit Card

2) Cards issued by other banks displaying Maestro, Master Card, Cirrus, VISA and VISA
Electron logos

3) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card,
Cirrus, VISA and VISA Electron logos

State Bank ATM-cum-Debit (State Bank Cash plus) Card:

India's largest bank is proud to offer you unparalleled convenience viz. State Bank ATM-
cum-Debit (Cash Plus) card. With this card, there is no need to carry cash in your wallet. You
can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit
Card.

Get an ATM-cum-Debit card with which you can transact for FREE at any of over 26,000
ATMs of State Bank Group within our country.

E) Area of Operation –
The business operations of SBI can be broadly classified into the key income generating areas
such as...

42
  National Banking
 International Banking
 Corporate Banking
 Treasury operations
 Associates and subsidiaries.
F) Ownership Pattern:
Holder's Name No of Shares % Share Holding
Promoters 413252443 61.58%
Financial Institutions 79444729 11.84%
Foreign Institutions 65020546 9.69%
General Public 39345464 5.86%
NBanks Mutual Funds 35857120 5.34%
Other Companies 19510691 2.91%
Foreign NRI 1039352 0.15%
Others 824231 0.12%
Central Govt 195151 0.03%
Foreign Ocb 32310 0.00%
Foreign Collaborators 415 0.00%
Foreign Industries 296 0.00%

Competitors Information:
Top performing Public & Private sector Banks:
Some of the major competitors for SBI in the banking sector in Gadag city are
 ICICI Bank
 HDFC Bank
 Axis Bank
 Syndicate Bank.
However in terms of average market share, SBI is by far the largest player in the market.
G) Infrastructural Facilities:
The Bank is well equipped with good quality furniture’s, design, interior decoration and air
condition enabled building, drinking water facility and good ambiance. The CC cameras have
been introduced for customer’s safety. The layout of the building enables workflow easier for
customers and good seating arrangement. the computer systems are well configured and

43
providing quick services to the customers and a large build-up area about 4000sq.ft. area with
one ATM machine within the building located at Mulgund Road Gadag.
H) Recent awards and recognitions:
 Best Online Banking Award, Best Customer Initiative Award & Best Risk
Management Award (Runner Up) by IBA Banking Technology Awards 2010
 The Bank of the year 2009, India (won the second year in a row) by The Banker
Magazine
 Best Bank – Large and Most Socially Responsible Bank by the Business Bank Awards
2009
 Best Bank 2009 by Business India
 The Most Trusted Brand 2009 by The Economic Times
 Most Preferred Bank & Most preferred Home loan provider by CNBC
Visionaries of Financial Inclusion By FINO
 Technology Bank of the Year by IBA Banking Technology Awards
 SKOCH Award 2010 for Virtual corporation Category for its e-payment solution
 The Brand Trust Report 11th most trusted brand in Hindustan.

44
I) Work flow model:

For Deposits
Customers

Deposit

Application review and Documentation

Processing

Cash, Cheque and Draft

Accounts

For Loans:
Work done

Customers

Deposit Specific Requirements

Filling of Application

Application review

Decision

Reject
Document
Repayment of Interest
Loan disbursement

45
 E – BANKING SERVICES PROVIDED BY STATE BANK OF INDIA-

State bank of India believes in adding convenience to the banking experience of its
customers. Its Alternate Delivery Channels give 24x7 accesses to its services, from anywhere
in the world.
The Bank provides various types of e-banking services to its customers, which aim to provide
satisfaction and ease to them. These services are as under:-

1. NET BANKING

Internet - Internet Banking service from IndusInd Bank offers banking services online with
the same personal efforts that customers receive at the branch. The online requests are
processed by a proactive team of Personal Bankers adhering to service quality standards.

The Internet banking service provided by the bank adds more value to NRI's who can view
their balances online and also effect funds transfer - just at the click of a mouse. Moreover,
Internet banking has no time zones and is accessible round the clock without restricting it to
any geographical boundary.

2. E-WALLET

It is a simple and convenient way to transact online from anywhere at any time. With this
service one can create own e-Wallet and assign accounts to it. The customers can then shop /
donate / subscribe online with the list of Merchants and authorize the transaction from their

46
chosen bank account using their transaction password. Moreover, they can also view all
these transactions online.

3. VISA MONEY TRANSFER

VISA MONEY TRANSFER - [VISA CARD-to-CARD Transfer]

No more waiting in queues in Bank branches, getting the Demand Drafts made, and writing
cheques that takes days to clear, IndusInd Bank provides the only solution to make it simpler,
convenient and faster by State Bank of India VISA Money Transfer.

From State Bank of India account, customers can now transfer money to any of the 23
million VISA Cards anywhere in India through SBI’s Net - State Bank of India’s Net
Banking service and any of State Bank of India ATM.

4. ATMs
The wide ATM network of State bank of India provides the following services to its customer
base:-

 Deposit Cash / Cheque- Special deposits slip-cum-envelopes are provided at the ATM
centers. The customers just have to fill in the details of cash or cheques and insert it into the
deposit slot.
 Withdraw Cash- One can withdraw up to Rs 15,000/- per day from his account using
the ATM/Debit card in any of the IndusInd ATMs across the country subject to

47
 availability of balance in the account. One can also shop up to Rs 25000 per day using
his/her debit card.

 Funds Transfer- Flexibility to allow on-line transfer of funds between the various
accounts linked with the ATM/Debit card of the customer.

 Fast Cash- In spite of holding multiple accounts, the customers have the option of
withdrawing cash through their primary account only.

 Visa Money Transfer- Visa Money Transfer is a revolutionary service which enables
the customer of IndusInd Bank to transfer money from their debit card to any other visa
debit /credit card anytime, anywhere in India.

5. BILL PAY

SBIs Bill pay is a simple, convenient and secure way of managing bills from anywhere, at
anytime.The customers can pay their Telephone bills, Electricity bills, Mobile bills, Insurance
Premium, Gas charges, Taxes etc. This service is absolutely FREE for customers.

1. PHONE BANKING
The customers of State bank of India can now call on the toll free numbers 1800 22 00 61
(All MTNL & BSNL subscribers or 022-44066666 (Local call in Mumbai).

State bank of India offers following facilities which the customers can avail with the help of
phone banking service:

48
• Balance Enquiry for Savings.
• Reading out last 3 transactions.
• Status of cheque issued by customer.
• Stop payment of an issued cheque.
• Detailed statement by FAX.
• Internal funds transfer between 2 A/Cs.
• Request for Cheque book.
• Request debit card replacement.
• Statement request for statement of A/C by mail or fax.

49
 E – BANKING SERVICES PROVIDED BY OTHER BANKS-

Despite of various e-banking facilities provided by IndusInd bank, there are many services

which the bank has not promoted as yet. As a suggestion measure, I may like to name and

explain a few of it, which other banks have been providing from quiet a long time. I would

like the Bank authorities to have a look at them and provide these services to its reputed

customer base, and hence improve customer satisfaction and contentment. Some of these

services are: -

1. TICKET BOOKING

This service is provided by ICICI Bank. With this service customers need not visit
reservation centers for booking tickets any more. They can buy their train tickets online and
pay using the Internet Banking Facility of the bank. For this ICICI Bank has tied up with
Indian Railway Catering and Tourism Corporation Ltd (IRCTC).This facility is available to
all internet banking customers of ICICI Bank.

For the purpose of making payment the customer’s Bank Account will be immediately
debited and payment confirmation number will be provided. Tickets are booked immediately
and PNR number is provided online to the customer, at Partner's website.

Further, No cash will be paid at the time of cancellation. The customer’s bank account will be
credited with the ticket amount less cancellation charges as levied by IRCTC. ICICI Bank
does not levy any cancellation charges.

50
2. SMART MONEY ORDER

This facility is being provided by ICICI Bank. Smart Money Order is a service provided in
partnership with India Post (The Department of Posts, Ministry of Communication and
Information Technology, Government of India).

Smart Money Order is a unique service that allows the customers to send a money order
anytime and to any destination in India. All Retail Internet Banking Customers can use this
facility. Under this, money is delivered at the receiver's doorstep.

3. ONE VIEW
OneView is a revolutionary service from HDFC Bank that allows its customers to manage
multiple accounts in different banks through one single online interface.

If you are an HDFC Bank customer and have one or more accounts with Citibank, ICICI
Bank, HSBC India, Standard Chartered Bank then OneView is just right for you.

For this service, the customers don’t need to individually log on to internet banking of every
account. They just have to log on to One View and they can manage up to FIVE accounts in
different banks. They will have to remember only ONE password. And this service is
provided absolutely FREE to the customers of HDFC Bank.

51
4. ONLINE TAX PAYMENT

This service is provided by ICICI Bank. It has tied up with online tax preparation service
providers to help its customers to prepare and file their taxes online. The customers can
choose their desired service offered by the service providers, pay on-line using
www.icicibank.com and avail of huge discounts.

Similarly, this service is also provided by many other banks including Axis Bank. Consequent
to the authorisation of the Bank by RBI and Govt. of India for conducting Govt. Business, the
Bank is handling Collection of various Central/ State Taxes through its authorised Branches.

5. E-PAYMENTS

Axis bank provides this e-banking facility to its customers. The Bank has entered into tie-ups
with various Govt. Departments for providing various G2B and G2C online payment facility
to the citizens and businesses thus providing convenience to them.

Few of the important online payment tie-ups entered into by Axis Bank with various Govt.
Departments is as under:

DGFT ePayments

52
 IRCTC - Online Railway Reservation
MCD - Municipal Tax or Fees ePayments
Sampark - Utility Bill ePayments
MCD - eTendering Project
Bangalore One Project - Utility Bill ePayments

6. ONLINE AUTHORISATION CODE (OAC)

This service is currently being provided by CitiBank. The customers can order a Demand
Draft online and have it delivered in over 700 locations in India.

To do so, they will need an Online Authorisation Code (OAC) which is a one time process
that has been introduced since November, 2006 in the Bank.

RESEARCH METHODOLOGY

53
PRIMARY DATA:

In this research with a sample size of nearly 100 customer’s data will be available
in form of questionnaire collected in terms of different questions influencing the use of
internet banking.
Internet Banking is considered as dependent on awareness among customers which
will be studied with help of different independent variables.

SECONDARY DATA:

Collection of information from different kinds of books the data of company what
they maintained.
Most of the data has been collected from Bank Assistant Mr. Nagaraj Adavi and by official
website of State Bank of India

TITLE OF THE STUDY

54
 “Services provided by SBI through E-Banking with reference to SBI Branches in
Muzaffarnagar city”. With reference to SBI Mulugund naka Branch Muzaffarnagar.

Statement of the problem:

1. To compare the trust level of traditional Banking with e-Banking service marketing
(consumer’s point of view).

2. To find the effectiveness & Reliability of Electronic Banking.

OBJECTIVES OF THE STUDY

55
 To understand the concept of E-banking and importance to bank as well as customers.

 To get aware of various aspects of E-banking.

 To know the uses of e-Banking for customers.

 To build up various solutions if any, for drawbacks in net banking.

 To offer useful suggestions.

 To know the customer satisfaction level and their perception regarding State Bank of
India.

TYPE OF RESEARCH

56
This study is descriptive in nature. It helps in breaking vague problem into smaller And
precise problem and emphasize on discovering of new ideas and insights.

RESEARCH DESIGN

Reasearch design constitutes the blue print for the collection, measurement and analysis of
data. The present study seeks to identify the extent of prefences of E – Banking over
traditional banking among ser\vice class. The research design is descriptive in nature. The
research design is descriptive in nature. The research has been conducted on customers of
STATE BANK OF INDIA within MUZAFFARNAGAR. For the selection of the sample,
Convenient sampling method was adopted and an attempt has been made to include all the
groups and all gender class.

A framework or blueprint for conducting the research project. It specifies the details of the
procedures necessary for obtaining the information needed to structure and/or solve research
problems. A good research design lays the foundation for conducting the project. A good
research design will ensure that the research project is conducted effectively and efficiently.
Typically, a research design involves the following components, or tasks:

 Define the information needed.

 Design the research.

 Specify the measurement and scaling procedures.

 Construct and present a questionnaire or an appropriate form for data collection.

 Specify the sampling process and sampling size.

 Develop a plan of data analysis.

Despite of various e-banking facilities provided by IndusInd bank, there are many services

which the bank has not promoted as yet. As a suggestion measure, I may like to name and

explain a few of it, which other banks have been providing from quiet a long time. I would

57
like the Bank authorities to have a look at them and provide these services to its reputed

customer base, and hence improve customer satisfaction and contentment. Some of these

services are: -

METHOD OF DATA COLLECTION

58
Data can be collected in different ways from the subject of study. One method is to observe
subjects on certain parameters, which is called observation studies. In such studies, the
subjects (respondents) by asking them questions through a questionnaire. For instance, if
research has to be done on the traffic flow at a particular junction, then the observation
method is best. On the other hand, if consumer preferences about a new product are to be
estimated, then a questionnaire for obtaining consumer responses is the best method.

Analytical tools in the research design analytical tools used Charts.

Sources of the Data

Data from two main sources were used,
Primary Data.
Secondary Data.

Data Collection Method:

Primary sources
Primary data was obtained through questionnaires filled by people residing the city of
Muzaffarnagar and through direct communication with respondents in the form of Interview

Secondary sources
The secondary sources of data were taken from the various websites, books, journals reports,
articles etc.

Sample Selection and size

The first step of research is sample selection. The total consumers covered
were 300. The same numbers of questionnaires were distributed. Results are based on the
response of these 300 respondents.

Sampling method
The consumers are selected by the convenience sampling method. The selection of units from
the population based on their easy availability and accessibility to the researcher is known as

59
convenience sampling. Convenience sampling is at its best in surveys dealing with an
exploratory purpose for generating ideas and hypothesis.

Research Plan
Descriptive Research Plan
Researcher has used descriptive research design, a scientific method which involves
observing and describing the behavior of a subject without influencing it in any way.

Method of Data collection

Data can be collected in different ways from the subject of study. One method is to observe
subjects on certain parameters, which is called observation studies. In such studies, the
subjects (respondents) by asking them questions through a questionnaire. For instance, if
research has to be done on the traffic flow at a particular junction, then the observation
method is best. On the other hand, if consumer preferences about a new product are to be
estimated, then a questionnaire for obtaining consumer responses is the best method.

SCOPE OF THE STUDY

60
  The study includes the services provided by SBI branches in Muzaffarnagar.
 It investigates about all applications of online banking in SBI.
 It would help society to understand the usefulness of electronic banking.
 The study will also help us to get the knowledge about process of e-Banking and
usefulness to banking industry.
 As the study contains the 360 degree information regarding SBI and its e-Banking,
 Hence the study will lead to new ways to tackle the problems and the SWOT of SBI
in respect of e- Banking.

Need for the study:

This study is needed to find out the working of internet banking of SBI and its importance to
customer as well as to bank
1. Organizing Educational Campaign to create Goodwill of company.
2. Services it effectively valuable to create place in the minds of customers.
3. Availability should be increased by using various service strategies.
4. Company should make service equal to better than competitive banks.
5. The report is helpful in knowing about the customers’ expectations about the Bank’s
services.

LIMITATIONS OF THE STUDY

61
  The primary limitation of the study is based on quality and originality of secondary
data taken via the official website of State Bank Of India and Reserve Bank of India.

 The study was concerned only to SBI branches in Muzaffarnagar city.

 Time constraint: on the time availability is 10 weeks only it was not able to do the
thorough study in the selected area.

 Due to continuous change in environment, what is relevant today maybe irrelevant

tomorrow.

 Merely asking questions and recording answers may not always elicit the actual
information sought.

 People were reluctant to go in to detail because of their busy schedule.

DATA ANALYSIS & INTERPRETATION

GENDER

62
Male 149

Female 50

Interpretation:
As per the graph shows majority respondents are Male i.e 75% & 25% Female.

OCCUPATION
business 56

professional 59

63
student 54

employee 50

Interpretation
As per the graph shows that 28% respondents in business sector, 30% respondents are
Professional, 17% respondents are Student, 25% respondents are Employee.

ANNUAL INCOME
below 1 lac 46
1-2 lac 60
2-3 lac 51

64
3-4 lac 27
4 lac & above 15

Interpretation:
The graph shows that 23% respondents get a Annual Income of below 1Lac, 30%
respondents Annual income of 1Lac to 2lac, 26% respondents get Annual income of 2lac to
3lac, 14% respondents get Annual income of 3lac to 4lac and REMAINING 7% respondents
get Annual income below 4lac .

USE E-BANKING
yes 82

65
no 117

Interpretation:
From the sample of respondents, 41% persons are using E-banking and 59% persons are not
using E-banking.

Aware of the online service provided

Yes 82

66
No 0

Interpretation:
From the sample of respondents, 100% persons are Aware of online service provided.

Aware of internet banking charges

Yes 65

67
NO 17

Interpretation:
From the sample of respondents, 79% persons are Aware of E-banking charges and 21%
persons are not Aware of E-banking charges.

Preference for E-Banking product

68
 Bill fund online online credit E- Bank
RANK ATM payment transfer investment shoping card ticket statement
rank-1 25 28 10 3 4 2 3 7
rank-2 30 28 5 5 5 2 4 6
rank-3 14 9 33 6 9 4 3 3
rank-4 1 6 9 25 22 3 11 5
rank-5 3 2 5 20 23 8 13 4
rank-6 4 3 7 4 10 18 25 13
rank-7 2 3 7 10 4 14 17 26
rank-8 3 3 6 9 5 31 6 18
Total 82 82 82 82 82 82 82 82

Interpretation: People give importance to service of state bank of India which are ranking
as Bill payment, ATM, Fund transfer, online investment, online shopping, E-Ticket, Bank
statement respectively .

5Reason for using E-banking

save time Any time access Tax payment Reduce
&money Administrative
overhead

69
Reason for using 17 38 04 23
E-banking

Interpretation:
This graph shows the Reason for using E-banking like……
17 Persons respondents save time & money, 38 Persons respondents Any time access, 4
persons respondents Tax payment, 23 persons respondents Reduce administrative overhead.

Rank the following Services of state bank of India

view new debit
account bill fund credit card transaction fund card
statement payment transfer payment statement transfer statement
rank-1 30 30 16 2 3 0 4

70
 rank-2 27 28 5 6 3 3 8
rank-3 13 12 35 9 7 3 6
rank-4 4 3 13 27 25 9 3
rank-5 1 3 4 6 26 28 11
rank-6 1 4 3 10 9 29 24
rank-7 6 2 6 22 9 10 26
Total 82 82 82 82 82 82 82

Interpretation:
People give importance to service of state bank of India which are ranking as :-
view account statement, bill payment, fund transfer, credit card payment, transaction
statement, new fund transfer, debit card statement respectively.
Rank the following Statements to your Agreement
easy fast accurat services fund lesse provide sav anyti lowe easy access
banki and ely are transfer ns d 24X7 es me r transaction data
ng eas bankin trustwor service is the stable tim and trans historical
trasact y g thy and easy huma es anywh actio
ions queries secure n er n
errors bankin fees

71
 g
facilit
y
strongly
agree 15 14 11 16 21 22 28 20 35 20 35
Agree 38 22 27 32 31 35 30 41 27 41 27
moderate 27 31 33 22 21 14 21 15 16 14 16
disagree 1 14 11 11 9 7 3 6 4 6 4
strongly
disagree 1 1 0 2 0 4 0 0 0 1 0
82 82 82 82 82 82 82 82 82 82 82

Interpretation:
From the above graph it is indicated that e-banking is used mostly as it is anytime and
anywhere banking facility & Easy access to transaction data ,easy banking transactions,
services are trustworthy and secure, fund transfer service is easy, lessens the human errors,
provided 24X7 stable, saves times, lower transaction fees respectively.

72
Rate your Satisfaction with E-Banking
view new debit
account bill fund credit card transaction fund card
statement payment transfer payment statement transfer statement
rank-1 30 30 16 2 3 0 4
rank-2 27 28 5 6 3 3 8
rank-3 13 12 35 9 7 3 6
rank-4 4 3 13 27 25 9 3
rank-5 1 3 4 6 26 28 11
rank-6 1 4 3 10 9 29 24
rank-7 6 2 6 22 9 10 26

73
Interpretation:
People give importance to service of state bank of India which are ranking as :-
view account statement, bill payment, fund transfer, credit card payment, transaction
statement, new fund transfer, debit card statement respectively.

Do E-banking
Cumulative
Do E-banking
Frequency Percent Valid Percent Percent
N Valid 100
Valid YES 100 100.0 100.0 100.0
Missing 0

Do e-banking
 The percentage of E-Banking users are 100%
 Here I took customer information from Bank containing only of users of Internet Banking and
e-banking users.

74
 Statistics
come to know about E-Banking
N Valid 100
Missing 0

come to know about E-Banking

Frequency Percent Valid Percent Cumulative Percent
Valid Friends 39 39.0 39.0 39.0
Family 7 7.0 7.0 46.0
Relatives 16 16.0 16.0 62.0
Bank officials 20 20.0 20.0 82.0
Advertisements 18 18.0 18.0 100.0
Total 100 100.0 100.0

Customers came to know about e-Banking

 39 respondents responded as friends
 20 respondents responded as Bank officials
 18 respondents chosen by advertisements.
 As shown in figure more respondents came to know about E-Banking by friends. From
Family were very few because it’s an electronic Banking and only educated and youngsters
can able to do.

75
 Statistics
feel E-Banking services are
necessary
N Valid 100
Missing 0

feel E-Banking services are necessary

Frequency Percent Valid Percent Cumulative Percent
Valid YES 73 73.0 73.0 73.0
NO 27 27.0 27.0 100.0
Total 100 100.0 100.0

Customers felt e-Banking services are necessary

 73 respondents responsed e-banking is necessary to them.
 Remaining 27 respondents responsed that are not necessary.
 The figure shows that most of the customers felt e-Banking a necessity in their life.

76
 Statistics
reasons for choosing SBI E-Banking
Services
N Valid 130
Missing 0

reasons for choosing SBI E-Banking Services

Frequency Percent Valid Percent Cumulative Percent
Valid Convenience 63 48.5 48.5 48.5
24 Hour Access to accounts 34 26.2 26.2 74.6
To Save Time 17 13.1 13.1 87.7
Other's 16 12.3 12.3 100.0
Total 130 100.0 100.0

Reasons for choosing SBI e-Banking Services

 63 Respondents (48%) chosen SBI e-Banking because of its convenience, 34(26%) chose
because of 24 hrs access to accounts, 17(13%) chose to save time and others chose for other
reasons 16(12%).
 Here the frequency is 138 i.e. respondents are only 100 but they chosen multiple choices
 From the figure it can be said that nearly 50% of the customers chose e-Banking because of
its convenience and 24 Hr access to their accounts.

77
 Statistics
services Customers think are more
user friendly
N Valid 100
Missing 0

services Customers think are more user friendly

Frequency Percent Valid Percent Cumulative Percent
Valid Internet Banking 58 58.0 58.0 58.0
ATM services 14 14.0 14.0 72.0
Telephone Banking 28 28.0 28.0 100.0
Total 100 100.0 100.0

Customers who think services are more user friendly

 Out of 100 respondents 58 responded Internet Banking as more user friendly compare to other
services. 28 respondents said telephone banking as user friendly & 14 said ATM as user
friendly.
 So as shown in figure internet banking users felt Internet Banking as more user friendly.
 In ATM’s they can’t do all the transactions as they do in other options.

78
 Statistics
Uses SBI online services
N Valid 100
Missing 0

Uses SBI online services

Frequency Percent Valid Percent Cumulative Percent
Valid Daily 17 17.0 17.0 17.0
Monthly 43 43.0 43.0 60.0
Weakly 24 24.0 24.0 84.0
Never 16 16.0 16.0 100.0
Total 100 100.0 100.0

Usage rate of SBI online services

 43 respondents responded that they use SBI Online services once in a month, 24 responded
once in a week.
 Remaining user use online services once in a day.

79
 Statistics
Products& Services customers use
regularly
N Valid 138
Missing 0

Products& Services customers use regularly

Frequency Percent Valid Percent Cumulative Percent
Valid account statement 62 44.9 44.9 44.9
E-ticketing 32 23.2 23.2 68.1
Checkbook request 12 8.7 8.7 76.8
E-payment 16 11.6 11.6 88.4
Transaction enquiry 16 11.6 11.6 100.0
Total 138 100.0 100.0

Products& Services customers use regularly

 62 respondents (44.9%) used e-Banking to check their account statement. 32 used for e-
Ticketing (23%),12 used for cheque book request (8.7),16 used for e-Payment and transaction
enquiry (11.6).
 From above it is clear that most of the customers use e-Banking to check their account
statements and for e-Ticketing.
 This is multiple option question so 100 respondents responded with multiple choices and the
frequency became 138.

80
 Statistics
Make purchasing through E-Banking
N Valid 100
Missing 0

Make purchasing through E-Banking

Frequency Percent Valid Percent Cumulative Percent
Valid YES 48 48.0 48.0 48.0
NO 52 52.0 52.0 100.0
Total 100 100.0 100.0

Make purchasing through e-Banking

 Out of 100 respondents 52 responded that they did not make purchasing through e-Banking.
 Only 48 respondents made purchasing through e-Banking.
 From the above graph more number of users did not make purchases through E-Banking.

81
 Statistics
Made purchasing through E-
Banking in the last 12months
N Valid 100
Missing 0

Made purchasing through E-Banking in the last 12months

Frequency Percent Valid Percent Cumulative Percent
Valid None 34 34.0 34.0 34.0
one time 32 32.0 32.0 66.0
two to four times 14 14.0 14.0 80.0
five to seven times 10 10.0 10.0 90.0
eight to ten times 6 6.0 6.0 96.0
over ten times 4 4.0 4.0 100.0
Total 100 100.0 100.0

Made purchasing through e-Banking in the last 12months

 34 respondents response is none. 32respondents purchased one time in year.
 Only few of respondents purchased many times through e-Banking because they prefer
manual banking more than e-Banking.
 From the above graph 50% of users do not make purchases through e-Banking.

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 Statistics
Other
Demat Value
Account Funds Account Bills Check TDS Added
Statement Transfer Statement Payment Book Enquiry Services
N Valid 100 100 100 100 100 100 100

Missin
0 0 0 0 0 0 0
g

Frequency Table

Account Statement
Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 25 25.0 25.0 25.0
Good 16 16.0 16.0 41.0
Excellent 16 16.0 16.0 57.0
Poor 16 16.0 16.0 73.0
N/A 27 27.0 27.0 100.0
Total 100 100.0 100.0

Funds Transfer
Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 20 20.0 20.0 20.0
Good 40 40.0 40.0 60.0
Excellent 24 24.0 24.0 84.0
Poor 5 5.0 5.0 89.0
N/A 11 11.0 11.0 100.0
Total 100 100.0 100.0

Demat Account Statement

Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 13 13.0 13.0 13.0
Good 31 31.0 31.0 44.0
Exellent 17 17.0 17.0 61.0
N/A 39 39.0 39.0 100.0
Total 100 100.0 100.0

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 Bills Payment
Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 16 16.0 16.0 16.0
Good 23 23.0 23.0 39.0
Excellent 30 30.0 30.0 69.0
Poor 6 6.0 6.0 75.0
N/A 25 25.0 25.0 100.0
Total 100 100.0 100.0

Cheque Book
Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 20 20.0 20.0 20.0
Good 41 41.0 41.0 61.0
Excellent 12 12.0 12.0 73.0
Poor 7 7.0 7.0 80.0
N/A 20 20.0 20.0 100.0
Total 100 100.0 100.0

TDS Enquiry
Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 32 32.0 32.0 32.0
Good 31 31.0 31.0 63.0
Excellent 6 6.0 6.0 69.0
Poor 6 6.0 6.0 75.0
N/A 25 25.0 25.0 100.0
Total 100 100.0 100.0

Other Value Added Services

Frequency Percent Valid Percent Cumulative Percent
Valid Good 33 33.0 33.0 33.0
Excellent 20 20.0 20.0 53.0
Poor 4 4.0 4.0 57.0
N/A 43 43.0 43.0 100.0
Total 100 100.0 100.0

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Bar Chart

 Out of 100 respondents, 27 responded as N/A & 25 for neutral, remaining

responded 16 for each.

 40 respondents responsed funds transfer is good and 24 were excellent here we

can come to know that more number of respondents likes this service.

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  39 were responded Demat acc is not applicable and 31 are responded as it was
good.
 By the above, number of users of Demat account statement users are less and
remaining were Good.

 Out of 100 respondents 30 were chosen to excellent 25 for good and 23 for neutral.

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 41 responded checkbook services were good & 20 were for neutral.

 32 & 31 respondents were responded to neutral & good respectively.

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  43 were responded other value added services are not applicable.

Statistics
Overall, satisfied with SBI E-
Banking
N Valid 100
Missing 0

Overall, satisfied with SBI E-Banking

Frequency Percent Valid Percent Cumulative Percent
Valid Very Satisfied 18 18.0 18.0 18.0
Unsatisfied 9 9.0 9.0 27.0
Satisfied 59 59.0 59.0 86.0
Neutral 14 14.0 14.0 100.0
Total 100 100.0 100.0

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 Overall, satisfied with SBI e-Banking
 59 respondents were satisfied with SBI E-Banking services and 18 were very satisfied.
 8 respondents chose unsatisfied because of some technical issues till not resolved.
 15 are neutral.

Statistics

Better rate
and lower
service 24 Hrs Privacy is Innovative Security of Quick
charges Access maintained Services transaction Services
N Valid 100 100 100 100 100 100
Missing 0 0 0 0 0 0

Frequency Table

Better rate and lower service charges

Frequency Percent Valid Percent Cumulative Percent
Valid Not Important 22 22.0 22.0 22.0
Very Important 46 46.0 46.0 68.0
Less Important 32 32.0 32.0 100.0
Total 100 100.0 100.0

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 24 Hrs Access
Frequency Percent Valid Percent Cumulative Percent
Valid Not Important 15 15.0 15.0 15.0
Very Important 51 51.0 51.0 66.0
Less Important 34 34.0 34.0 100.0
Total 100 100.0 100.0

Privacy is maintained
Frequency Percent Valid Percent Cumulative Percent
Valid Not Important 15 15.0 15.0 15.0
Very Important 63 63.0 63.0 78.0
Less Important 22 22.0 22.0 100.0
Total 100 100.0 100.0

Innovative Services
Frequency Percent Valid Percent Cumulative Percent
Valid Not Important 9 9.0 9.0 9.0
Very Important 47 47.0 47.0 56.0
Less Important 44 44.0 44.0 100.0
Total 100 100.0 100.0

Security of transaction
Frequency Percent Valid Percent Cumulative Percent
Valid Not Important 13 13.0 13.0 13.0
Very Important 81 81.0 81.0 94.0
Less Important 6 6.0 6.0 100.0
Total 100 100.0 100.0

Quick Services
Frequency Percent Valid Percent Cumulative Percent
Valid Not Important 15 15.0 15.0 15.0
Very Important 62 62.0 62.0 77.0
Less Important 23 23.0 23.0 100.0
Total 100 100.0 100.0

FACTS AND FINDINGS

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Facts of the study
 Maximum number of customers came to know about e- Banking services from their
friends.

 More number of respondents felt e-Banking services as a necessity for their busy life
and the reasons behind choosing e-Banking was- its convenience & 24/7 access. The
other reason was that it saves their time.

 More number of respondents felt internet Banking services as more user friendly than
other services.

 Only few customers used electronic services for e-Shopping and remaining customers
preferred traditional system.

 Overall, customers felt satisfied with SBI e-Banking services.

 Most of the customers used ATM services 2 to 5 times in a month.

Findings of the study

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► Majority of the customers are satisfied with State Bankof India.

► Majority of the customers are aware of services and extra services offered by State
Bankof India. But not all the services.

► The majority of the customers found services of the bank are average.

► Majority of the respondents are found the bank is average in maintaining the good
customer relationship.

► Majority of the respondent said that they are facing the problem of timeliness and rest
are facing problem of customer relationship and infrastructure.

► The perception of the majority of the customer regarding the bank is good because
majority of the customers are satisfied with the bank and they also recommend the products
of the bank.

► The most preferable extra service is ATM’s and the less preferable services are bills
payment, net banking and phone banking.

► The majority of customers are more interested in FD’s, mutual funds and saving a/cs.

► The majority of the customers are satisfied with the dealing of the officials upto some
extent.

► Main factor that attract customers towards bank is the services of the bank.

► Services that are most used by the customer are saving a/c, FD’s, current a/c and
loans.

CONCLUSIONS

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 Skilled employees are less with reference to electronic banking than manual banking.

 Decision making will be in the hands of top management only.

 The Bank is serving customers with fully automated system.

 The number of Electronic banking users is rapidly increasing.

RECOMMENDATION AND SUGGESTIONS

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 Provide more training to the employees and customers about the handling of the
electronic banking procedures.

 Reduce the complex procedures in the electronic Banking.

 Quick response to customers should be given while providing services through

customer care services.

 Technology & Security related issues should be handled very carefully to retain
customers.

APPENDIX

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Dear Sir/ Madam,
I am Mr. Fahad Mohammad Hussain, a final year MBA student of SDCMS, I
am conducting a survey on “Services provided by SBI through E-Banking with reference to
SBI branches in MUZAFFARNAGAR city”. Please provide relevant information by filling
this questionnaire to make my survey more comprehensive. All details given by you will be
kept confidential.

QUESTIONNAIRE ON “SATISFACTION FROM E – BANKING SERVICES.

A COMPLETE STUDY OF STATE BANK OF INDIA.

Personal details:
NAME: …………………………………..
AGE: .…………………………………..
OCCUPATION: …………………………………...
E-MAIL ID : ……………………………………
MOB. NO. : …………………………………..
ADDRESS: …………………………………..
…………………………………..

1) Do you do E-Banking?

YES NO

2) How did u come to know about E-Banking?

Friends Family

Relatives Bank officials

Advertisement

3) Do you feel E-Banking services are necessary?

YES NO
Reason ……………………………………………………………..
……………………………………………………………………...

4) What are the reasons for choosing SBI E-Banking services? Please select all that apply

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 Convenience 24Hour access to accounts

To save time other’s

5) Which of the following services you think, are more user friendly?

Internet Banking: ATM Services:

Telephone Banking:

6) How often do you use SBI online services?

Daily Monthly
Weekly Never

7) Which online products& Services do you use regularly? Please select all that apply

E-Ticketing Demand Draft

Cheque Book Request SBI E-Tax
Account Statement E-Payment
Transaction Enquiry Third Party Transfer
Demat Account Statement

8)Do you make purchasing through E-Banking?

Yes No

9) Approximately how many times you have made purchasing through E-Banking in the last
12 months?

1 time 2 to 4 times
5 to 7 times 8 to 10 times
Over 10 times

10) Please rate the following online Features of SBI

+2 +1 0 -1 -2
Excellent Good Neutral Poor N/A

Account Statement

Funds Transfer

Demat Account statement

Bill Payment

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Cheque book request

TDS Enquiry

Other Value Added services

11) Overall, how satisfied you are with SBI E-banking?

Very satisfied Unsatisfied

Satisfied Very unsatisfied

Neutral
12) For your choice of E- banking, which of the following factors do you feel important?
-1 0 +1
Less Not Very
Important Important Important

Better rate and lower service charge

24 hours access

Privacy is maintained

Innovative services

Security of Transaction

Quick service

13) Do you still visit the bank since after having started using SBI E- banking?

YES NO

If ‘YES’ why?
…………………………………………………………………………………………………
……………………………………………………………………………

14) What is the main reason to visit your bank branch? (Please choose the single most
important reason)

To make deposit To get advice for investment options

To inquire about balance To withdraw cash
Other
15) How frequently do you use an Automated Teller Machine (ATM) per month?

1 time only 2 to 5 times

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 6 to 8 times 9 to 12 times

Over 12 times

BIBLIOGRAPHY

Books :-

 SBI Training guide for internet banking

Websites:-

 www.statebankofindia.com
 www.onlinesbi.com
 www.weikipedia.com
 www.google.com

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