E-banking project

1. 1. 1 PROJECT REPORT ON “AWARENESS & ACTUAL USAGE OF E-BANKING”

A PROJECT REPORT SUBMITTED TO THE UNIVERSITY OF MUMBAI FOR THE
DEGREE OF BACHELOR OF MANAGEMENT STUDIES [VTH SEM] SUBMITTED
BY ARPAN MUKHERJEE SEAT NO -07 PROJECT GUIDE PROF CHETAN JIWANI
K. J SOMAIYA COLLEGE OF SCIENCE & COMMERCE VIDYANAGAR,
VIDYAVIHAR, MUMBAI UNIVERSITY OF MUMBAI 2012-2013
2. 2. 2 PROJECT REPORT ON “AWARENESS & ACTUAL USAGE OF E-BANKING”
A PROJECT REPORT SUBMITTED TO THE UNIVERSITY OF MUMBAI FOR THE
DEGREE OF BACHELOR OF MANAGEMENT STUDIES [VTH SEM] SUBMITTED
BY ARPAN MUKHERJEE SEAT NO -07 PROJECT GUIDE PROF CHETAN JIWANI
K. J SOMAIYA COLLEGE OF SCIENCE & COMMERCE VIDYANAGAR,
VIDYAVIHAR, MUMBAI UNIVERSITY OF MUMBAI 2012-2013
3. 3. 3 1.1 Introduction Electronic banking is an umbrella term for the process by which a
customer may perform banking transactions electronically without visiting a brick-and-
mortar institution. The following terms all refer to one form or another of electronic
banking: personal computer (PC) banking, Internet banking, virtual banking, online
banking, home banking, remote electronic banking, and phone banking. PC banking and
Internet or online banking is the most frequently used designations. It should be noted,
however, that the terms used to describe the various types of electronic banking are often
used interchangeably. Electronic banking is an activity that is not new to banks or their
customers. Banks having been providing their services to customers electronically for
years through software programs. These software programs allowed the user‘s personal
computer to dial up the bank directly. In the past however, banks have been very
reluctant to provide their customers with banking via the Internet due to security
concerns. Today, banks seem to be jumping on the bandwagon of Internet banking. Why
is there a sudden increase of bank interests in the Internet? The first major reason is
because of the improved security and encryption methods developed on the Internet. The
second reason is that banks did not want to lose a potential market share to banks that
were quick to offer their services on the Internet. Many of the banks like ICICI, HDFC,
IndusInd, IDBI, Citibank,Global Trust Bank (GTB), Bank of Punjab and State bank of
India(SBI) were offering E-banking services.The analysts‘ comments that India had a
high growth potential for e-banking the players focused on increasing and improving
their E-banking services. As a part of this, the banks began to collaborate with functions
online. Why is there a sudden increase of bank interests in the Internet? The first major
reason is because of the improved security and encryption methods developed on the
Internet. The second reason is that banks did not want to lose a potential market share to
banks that were quick to offer their services on the Internet.
4. 4. 4 E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels. E- banking includes the systems that enable financial institution
customers.Individuals or businesses, to access accounts, transact business, or obtain
information on financial products and services through a public or private network
including the Internet,Customers access e-banking services using an intelligent electronic
device. The E-banking was firstly introduced in India by the ICICI around 1996. There
 after many other banks like HDFC, SBI, IDBI, Citibank Trust Banks, UTI, etc followed
the service. As today private and foreign bank had started capturing the market through e-
banking hence ―the competition is heating up and the lack of technology can make a
bank loose a customer‖ so now the public banks are breaking the shackles of traditional
set-up and gearing up to face the competition posed by the private sector counterparts.
5. 5. 5 1.2 The Internet-A distribution channel The internet has become an extension of
hotel chains' global distribution systems (GDSs). It offers three particular strategic
possibilities: (1) To drive revenues by extending the company's reach to broader, more
global markets. (2) To reduce costs by bypassing traditional distribution channels (e.g.,
airline GDSs), avoiding commissions, and lowering transaction fees. (3) To enhance
customer service by providing more and better information with multimedia. The
potential of the market for guests' booking their own rooms is considerable, and
electronic bookings are generally less expensive to complete than those from other
channels, notably toll- free telephone lines. The technology is new enough that many
difficulties remain, however. Of the top-ten sites maintained by luxury hotel operators,
for instance, none provided for real-time, online reservations. Midscale and economy
operators have been able to make better progress in online reservations, in part because
their rooms are more uniform than those of luxury operators. Purchasers of corporate
travel are able to use electronic booking to monitor and gain better control of their travel
expenses. Hotel chains that assist corporate travel departments in this effort, through
direct connections, can benefit. Prospects for group sales remain in the future, because
the design of GDS and internet software does not yet capture the many complications of
room-block and meeting room purchases. Meeting planners can, however, find meeting-
related information on the internet. Among other shortcomings of the internet are the
overwhelming volume of information available and concerns about the security of data
transmission and storage. Perhaps the greatest challenge of electronic distribution is
achieving some form of competitive advantage from GDSs and web sites—since so much
of today's technology is easily copied. Finally, no precise formula exists for how a
particular hotel operation should allocate its resources for electronic commerce. That
determination stems from the hotel's overall marketing strategy.
6. 6. 6 1.3 The Global E-Banking Scenario The banking industry is expected to be a leading
player in e-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 e-business in the UK was concentrated in the financial
services sector, and with the expected 10-fold increase of the British e-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, according to
UNCTAD, 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. 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 more 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 Asia, the
major factor restricting growth of e-banking is security, in spite of several countries being
well connected via Internet. Access to high-quality e-banking products is an issue as well.
Majority of banks in Asia are just offering basic services compared with those of
developed countries. Still, e-banking seems to have a future in Asia. According to
McKinsey survey, e- 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. However, providing this service would be difficult for
banks in Asia because it requires a high level of security and involves arranging
transactions with a variety of players.
7. 7. 7 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 were either offering e-banking services at various levels or planned
to do so in the near future. Some of the private banks included ICICI Bank, HDFC
Bank,IndusInd 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. The above statistics reveal that
India does have a high growth potential for e-banking. The banks have already started
focusing on increasing and improving their e-banking services. As a part of this, the
banks have begun to collaborate with various utility companies to enable the customers to
perform various functions online. In 2001, over 50 percent of the banks in the US were
offering e-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; e-banking was expected to influence the
banking industry structure. The economics of e-banking was expected to favor large
banks because of economies of scale and scope, and the ability to advertise heavily.
Moreover, e-banking offered entry and expansion opportunities that small banks
traditionally lacked. In Europe, the Internet is accelerating the reconfiguration of the
banking industry into three separate businesses: production, distribution and advice. This
reconfiguration is being further driven by the Internet, due to the combined impact of: 
The emergence of new, more focused business models.  New technological capabilities
that reduces banking relationship and transaction costs.  High degree of uncertainty over
the impact that new entrants will have on current business models. Though e-banking in
the Europe is still in the evolutionary stage, it is very clear that it is having a significant
impact on traditional banking activities. Unlike in the US, though large banks in the
Europe have a competitive edge due to their ability to invest heavily in new technologies,
they are still not ready to embrace banking.
8. 8. 8 1.4Indian E-banking Scenario As per the international report the banking transactions
on a brick and mortar banking costs around $ 1.1. While through ATM it costs around $
0.27 and just 1 percent of over the counter banking in case of Internet banking. Statistics
such as these have woken the Indian Banking Industry. Thus, the Indian banking system
is seeing a fabulous change in the quality of service provided by them. Technology is the
root of this change, which is implemented by the banks‘ to win more business from
customers. Almost all the private sector banks are moving towards e-enabling their
 existing products. HDFC Bank and ICICI Bank have taken a lead in introducing e-
banking in India. Internet banking starts from migrating existing products to the net. This
started initially with simple functions such as getting information about interest rates,
checking account balances and computing loan eligibility. Then the services were
extended to online bill payment, transfer of funds between accounts and cash
management services for corporates. Recently, banks started setting up payment
gateways for B2B and B2Ctransactions. This is to facilitate payment for e- commerce
transactions by directly debiting bank accounts or through credit cards. Banks can earn a
commission based income, on the transaction or sale value resulting in higher other
income. This could be more than the revenues they can generate from credit card
transactions. Private sector banks have leveraged the Internet effectively in taking away
the customers from public sector banks and significantly increased their revenue
potential. Internet banking is just one manifestation of these banks‘ technological
capabilities. They have a complete automation, an electronic customer database, real time
transaction processing capabilities and the latest technological platforms. Management of
these banks is very focused in using technology as a key competitive tool. The capability
of the management is also visible in terms of their profitability. Among the private sector
banks HDFC Bank and ICICI Bank have excellent returns on equity compared to their
peers in the industry.
9. 9. 9 These banks commenced operations few years and have negligible excess in terms of
branches and employees. Therefore unlike most other banks around the world, e-banking
is not an added cost for them. In fact it is expected to contribute significantly to their
revenues and profits in years to come. The distribution of banking business in India is
highly skewed both geographically and in terms of customer segment. Geographically the
top 100 centres account for around 70 percent of the loans disbursed. This are expected to
account for mostly early Internet users. In terms of customer segment, key focus on the
asset side is the corporate sector.This segment accounts for a high share of profits of
banks and is likely to be an early adapter to the Internet. On the liability side Internet
banking is expected to boost customer acquisition and profitability significantly in the top
corporate segment and in the urban high/middle income retail segments. Apart from e-
banking, future prospects of e-commerce is also strong as it is set for explosive growth
rates. According to the NASSCOM‘s survey, e-business transactions in India are
expected to reach to Rs 12 billion by 2000-01 from Rs 4.5 billion in the previous year.
For e- commerce to take off there is a need for real time financial intermediation and
there are very few banks offering this in India. The right combination of customer
relationship and technological competency is required to dominate the financial
intermediation of e-commerce. Who else than private sector banks can provide such
services? They are all set to lead the segment with a marginal competition from foreign
banks. Going forward, as the share of e-commerce in the economy increases,these banks
should be able to move up their market share apart from generating higher fee based
income. But one does wonder what difference e-banking make with only 22 percent of
the Internet uses globally utilizing e-banking services. In India also the penetration is less
than 1 percent. It is not all win-win case for Internet banking in India. A number of
uncertainties surround e-banking and
10. 10. 10 e-commerce ventures. Among the others, hurdles like low Internet penetration,
security issues, tax considerations and credit issues continue to depress the growth of the
 segment. Even if the government has passed the cyber laws,still there is a lack of clarity
about legislative aspects governing the sector and the effectiveness of the administration
to track & punish cyber crimes. It all depends on the ability of banks to enter these
businesses successfully.Those banks which have already started e-banking will have to
continuously update their services to retain the potential customers since any customer is
just a click away from a competitor elsewhere. Also, one cannot afford to depend only on
Internet banking; brick and mortar will continue to play an important role. For those,
which are yet to begin, are ignoring the potential customers by remaining away from the
latest technology.
11. 11. 11 1.5 TYPES OF INTERNET BANKING OR E-BANKING Understanding the
various types of Internet banking will help examiners assess the risks involved. Currently,
the following three basic kinds of Internet banking are being employed in the
marketplace. Informational This is the basic level of Internet banking. Typically, the bank
has marketing information about the bank‘s products and services on a stand-alone
server. The risk is relatively low, as informational systems typically have no path
between the server and the bank‘s internal network. This level of Internet banking can be
provided by the banks or outsourced. While the risk to a bank is relatively low, the server
or web site may be vulnerable to alteration.Appropriate controls therefore must be in
place to prevent unauthorized alterations to the bank‘s server or web site. Communicative
This type of Internet banking systems and the customer. The interaction between the
bank‘s system and the customer. The interaction maybe limited to electronic mail,
account enquiry, loan applications, or static file updates (name and address change).
Because these servers may have a path to the bank‘s internal networks, the risk is higher
with this configuration than with informational systems. Appropriate controls need to be
in the place to prevent, monitor, and alert management of any unauthorized attempt to
access the bank‘s internal networks and computer systems. Virus controls also become
much more critical in this environment. Transactional This level of Internet banking
allows customers to execute transactions. Since a path typically exists between the server
and the bank or outsourcer‘s internal network, this is the highest risk architecture and
must have the strongest controls. Customer transactions can include accessing accounts,
paying bills, transferring funds etc.
12. 12. 12 1.6 FEATURES OF E-BANKING Transactional:(e.g. performing a financial
transaction such as an account to account transfer, paying a bill or applications like
applying for a loan, new account, etc.)  Electronic Bill Presentment and Payment
(EBPP)  Funds transfer between customers own checking and savings accounts, or to
another customers account.  Investment purchase or sale.  Loan application and
transactions such as repayments. Non-transactional: (e.g. online statements, Check links,
Chat, Co-browsing etc.) Financial Institution Administration- features allowing financial
institutions to manage the online experience of their end users.ASP/ Hosting
Administration – features allowing the hosting company to administer the solution across
financial institution.
13. 13. 13 1.7Advantages & Dis-advantages of E-Banking We find that there are many
advantages of E-banking like:  Online banking gives more interest rates than any other
form of banking and also saves lot of expenses.  We can carry out all banking
transactions at our own convenience and do not have to depend on normal bank timings.
 Lot of precious time is saved because of e- banking, as transactions are carried out in
 seconds and we can see the updates immediately.  Since everything is computerized, we
save all the paper work and we save the trouble of maintaining physical records. There is
nothing manual hence the records are perfect and accurate.  Banks also provide balance
alerts if our balance reduces and alerts the customer in case of due dates of our bill
occurs.  There are no extra charges and these e-banking services are absolutely free.
Previously banks used to charge heavily for all their services.  There is improvement in
customer access, since the bank can access more customers within a short time through
the internet.  The customers can be offered more services through online banking.
14. 14. 14 There are also some disadvantages of online banking which restricts people to use
this service, like:  E-banking has reduced the bank to customer personal interaction,
since all the transactions are handled by the customer from the internet account there is
no personalized banking service which reduces customer to bank interaction.  When you
are entering e-banking instructions there is always a chance that the information may be
leaked or your account can be hacked and all your confidential information is leaked.
There are many banks that have good security systems to guard such thefts.  You can
access your online banking account by entering your personal identification and your
password. This password can be used by anyone to access your account and transfer
funds or cause financial problems. Whereas when you are visit the bank personally your
account is handled by the bank staff and therefore your confidential information cannot
be viewed by anyone. Also all your instructions are given in writing with your signature,
therefore there are less chances of fraud and information leak.  When you are using
internet banking the internet security is a big problem faced by many banks. So the
customer must be aware of the security issues and protect their identity and other
personal details from hackers.
15. 15. 15 To make online banking a safe and secure banking experience you need to follow
these steps:  Avoid accessing your account from a cyber café or a shared computer. If
you are happen to do so then change your password as soon as you finish your banking
transaction.  Every time you finish using your online banking session then sign out
from the site rather then just closing the browser.  Change your internet banking
password after your first login and thereafter regularly.  Use complex and difficult
password and make it difficult for others to guess.  Use different id and password for
different internet accounts.  Never share your passwords or login details with anybody.
 View your account daily and check it with your transactions, if there is any thing
which does not tally with your instructions then inform your bank immediately. The
advantages of online banking outnumber its disadvantages and therefore this form of
banking has become very popular with the customers. In this modern age of banking,
online banking or net banking has made things easier for people and saves lot of time .
Though internet banking is the need of every customer, some banks are still not having
advance features like transferring money to any bank across the country or easy
registration for net banking, this is because some banks are situated in the rural areas
where the use of computers is not common. All customers of all banks can be linked by
net banking only if technology reaches even the most remote areas of the country.
16. 16. 16 1.8Mediums of E-banking Various products and services Electronic banking, also
known electronic fund transfer (EFT), uses computer and electronic technology as a
substitute for checks and other paper transactions. EFTsare initiated through devices like
 cards or codes that let you, or those you authorize,access your account. Many financial
institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this
purpose. Some use other forms of debit cards and personal Identification Numbers (PINs)
for this purpose. Some use other forms of debit cards such as those that require, at the
most, your signature or a scan. The federal Electronic Fund Transfer Act (EFT Act)
covers some electronic consumer transactions. Following are the electronic medium by
which services are generally provided by the banks as a part of e-banking services. 
InternetBanking  ATM(AutomaticTeller Machine)  PhoneBanking  MobileBanking 
PaymentCards (Debits/CreditCard) All the above mediums provide services, which can
be, also know as ―any time anywhere banking‖. This facilitates the customer of the bank
to operate their account from any corner of the world, without visiting local or any
subsidiary branch of their banks.Efforts are made by the bank not only to provide the
facility to the customer, but also to reduce the operational cost of the bank by providing
e-banking services. So with this, banks have to employ less staff and still would be able
to deliver service to the customer ,round the corner.
17. 17. 17 Internet Banking Net banking is a web-based service that enables the banks
authorized customers to access their account information. It allows the customers to log
on to the banks website with the help of bank‘s issued identification and personal
identification number (PIN). The banking system verifies the user and provides access to
the requested services, the rage of products and service offered by each bank on the
internet differs widely in there content.Most banks offer net banking as a value-added
service. Net banking has also led to the emergent of new banks, which operate only
through the internet and do not exists physically, Such banks are called ―virtual‖ banks
or ―Internet Only‖ banks. A couple of years ago, there was a belief even among bankers
that customers opening new accounts wanted the online banking facility, just to ‗feel
good‘ and very few of them actually used that services. Today, bankers believe that the
trend from ‗nice to have‘ is changing to ‗need to have‘ .after all it depends on how busy
a person is. Services provided through Internet Banking 1) account information 2) E-
cheques (Online Fund Transfer) 3) Bill Payment Service 4) Requests And Intimations 5)
Demat Account share trading
18. 18. 18 Account information Provides summary of all bank accounts.Allow transaction
tracking which enables retrieval of transaction details based on cheque number,
transaction amount, and date.Provide account statement and transaction reports used on
user-defined criteria. Customers can even download and print the statement of accounts.
E-Cheques ( Online Fund Transfer) Customer can transfer funds:Transfer funds between
accounts, even if they are in different branches‘ cities Customer can also transfer funds to
any person having an account with the same bank anytime, anywhere, using third party
funds transfer option. Bill Payment Service Banks Bill Pay is the easiest way to manage
bills. A/c holder can pay their regular monthly bills i.e. telephone, electricity, mobile
phone, insurance etc. at anytime, anywhere for free.Saves time and effort. Make bill
payments at customer‘s convenience form their home or office.Lets a/c holders check
their hill amount before it is debited form their account. No debits to account without
their knowledge. No more missed deadlines, no more loss of interest – a/c holder can
schedule their bills in advance, avoid missing the bill deadlines as well as earn extra
interest on their money.Track payment history – all payments to a biller are stored
automatically for future reference. No queuing up at collection centers or writing cheque
 any more! Just a few clicks and customers account will be debited for the exact amount
they ask.
19. 19. 19 Requests And Intimations Can electronically submit a request for:  Cheque-book
 Stop payment instructions  Opening a fixed deposit  Opening a recurring deposit 
Intimate for the loss of ATM card  Register online for phone and mobile banking 
Cheque status Online application for debit card  Issue a DD or a Banker‘s cheque form
account at special rates. Just select the account to be debited form and give details of the
amount, location and beneficiary. The demand draft will be couriered to a/c holder at
their mailing address.  Customers can get their applications for issuance of Letters of
Credit and Bank  Guarantees processed online.  Book your Railways Ticket Online.
20. 20. 20 Demat Account and Share Trading Demat Account Demat is commonly used
abbreviation of ‗Dematerialisation‘, which is a process where by securities like share,
debentures are converted from the ‗material‘ (paper documents)unto electronic data and
stored in the computer of an electronic Depository. A depository is a security ‗banks,‘
where dematerialized physical securities are held in custody, and form where they can be
traded. This facilitates faster, risk-free and low cost settlement. Share Trading In share
trading a customer can buy and sell securities online without stepping into a broker‘s
office. Once the share are dematerialized then the trading can be done from home or
office. As demat a/c are directly linked to the customer‘s bank a/c, so there is no need to
write cheque for the payments or to fill up the slips to deposit the cheque.Amount for the
purchase and sale of securities is automatically debited or credited to their bank a/c. it
also brings the same convenience while investing in Mutual funds also Hassle free and
Paperless.
21. 21. 21 ATMs Automated Teller Machines or 24-hour Tellers are electronic terminals that
let you bank almost anytime. To withdraw cash, make deposits, or transfer funds between
accounts,you generally insert an ATM card and enter your PIN. Some financial
institution and ATM owners charge a fee, particularly to consumers who don‘t have
accounts with the moron transactions at remote locations. Generally, ATMs must tell you
they charge a fee and its amount on or at the terminal screen before you complete the
transaction. Check the rules of our institution and ATMs you use to find out when or
whether a fee is charged. It won‘t be just if I start explaining what an ATM is. ATMs and
cash dispensers are by far the largest investment ever made in electronic self-service by
financial institutions.Over US$ 40 billion has been invested in simply buying these
machines and many times that in running them. There are now over 1.1 million machines
operating in over 140countries worldwide. The banks are losing the cashiers checks,
check cashing and even cash dispensing to the-stores and grocery stores. They are asleep
at the switch and watching more transactions walk away to convenience stores and
supermarkets that provide 24 hour access and integrated transactions. ATMs do provide a
larger set of functions, such as check cashing, ticket sales or money orders. We already
know that cash dispensing as a dedicated function is a sustainable applications, the
question is whether that application can be incorporated successfully into a more complex
consumer product that offers multiple applications.It is worth noting that, due to market
saturation, overall ATM usage is increasing while transaction volume on a per-ATM
basis is now in decline.
22. 22. 22 Cash withdrawal Withdraw upto Rs.15,000/- per day from your account. Fast cash
options provides the facility of withdrawing prefixed amounts. Ultra Fast Cash option
 allows you to withdraw Rs.3000/- in one shot. Balance Enquiry Know your ledger
balance and available balance Mini Statement Get a printout of your last 8 transactions
and your current balance. Deposit Cash / Cheques Available at all full function ATMs.
Customers can deposit both cash and cheques. Cash deposited in ATMs will be credited
to the account on the same day (provided cash is deposited before the clearing) and
cheques are sent for clearing on the next working day. Funds Transfer: Transfer funds
from one account to another linked account in the same branch. PIN Changes Change the
Personal Identification Number (PIN) of ATM or Debit card.
23. 23. 23 Payments The latest feature of our ATMs, this functionality can be used for
payment of bills, making donations to temples / trusts, buying internet packs, airtime
recharges for prepaid mobile phones and much more. Others Request for a checkbook
from our ATMs and our concerned branch will dispatch it such that it reaches you within
10 working days. ATM Advantages  24-hour access to cash You can withdraw up to
Rs. 10,000/- per day on your ATM Card. The fast cash option saves your time by
providing the cash in denominations of Rs. 500/-  Balance inquiry Your updated
balance will appear on the screen and will also be printed on the transaction slip.  Mini-
statement request Get details of the last 9 transactions on your account with the mini-
statement, along with your balance.  Cheque bookrequest Send us a request for a
cheque book or account statement it will arrive at your doorstep.  Funds transfer
Transfer money from one of your accounts to another. It‘s easy, select the account from
which you want to transfer, then indicate the amount and the account to which your want
it transferred. Both accounts must be linked to your ATM card and customer ID. A
maximum of 5 saving and 5 Current accounts can be linked.  PIN change Your can
conveniently charge your (PIN) given at the time of opening your account)whenever you
wish. Stay totally in control and ensure complete security for your ATM Card.  Bill Pay
Pay your cellular, telephone and electricity bills using your ATM Card.
24. 24. 24 Tele banking or Phone Banking: Telephone banking is relatively new Electronic
Banking Product. However it is fastly becoming one of the most popular
products.Customer can perform a number of transactions from the convenience of their
own home or office; in fact from anywhere they have access to phone. Customers can do
following:-  Check balances and statement information  Transfer funds from one
account to another  Pay certain bills  Order statements or cheque books  Demand draft
request. This facility is available with the help of Voice Response System (VRS). This
system basically, accepts only TONE dialed input. Like the ATM customer has to follow
particular process, initially account number and telephone PIN are fed for the process to
start. Also the VRS system provides the users within additional facilities such as
changing existing password with the new desired, information about new
products,current interest rates etc.
25. 25. 25 Mobile Banking: Mobile banking comes in as a part of the banks initiative to offer
multiple channels banking providing convenience for its customer. A versatile
multifunctional, free service that is accessible and viewable on the monitor of mobile
phone. Mobile phones are playing great role in Indian banking- both directly and
indirectly. They are being used both as banking and other channels. Mobile Banking
refers to provision and availment of banking- and financial services with the help of
mobile telecommunication devices.The scope of offered services may include facilities to
conduct bank and stock market transactions, to administer accounts and to access
 customised information." According to this model Mobile Banking can be said to consist
of three inter-related concepts:  Mobile Accounting  Mobile Brokerage  Mobile
Financial Information Services Most services in the categories designated Accounting
and Brokerage are transaction-based. The non-transaction-based services of an
informational nature are however essential for conducting transactions - for instance,
balance inquiries might be needed before committing a money remittance. The
accounting and brokerage services are therefore offered invariably in combination with
information services. Information services, on the other hand, may be offered as an
independent module. Mobile phone banking may also be used to help in business
situations as well as financial.
26. 26. 26 Payment Cards (Debits/Credit Card) The card industry, which is growing at the
rate of 20% per annum, is flooded with cards ranging from gold, silver, global, smart to
secure the list is endless. From just two players in early 80s, the industry now houses over
10 major players vying for a major chunk of the card pie. Currently four major bishops
are ruling the card empire – Citibank, Standard Chartered Bank. HSBC and State Bank of
India (SBI). The industry, which is catering to over 3.8 million card users, is expected to
double by the fiscal 2003. Accordingly to a study conducted by State bank of India,
Citibank is the dominant player, having issued 1.5 million cards so far. Stanch art follows
way behind with 0.67 million,while Hong Kong Bank has 0.3 million credit card
customers. Among the nationalized banks, SBI tops the list with 0.28 million cards,
followed by Blanks of Baroda at 0.22 million. The credit card market in India, which
started out in 1981, is on the verge of an unprecedented boom. Between 1987 and 2000,
the market has virtually grown to over 3.8 million cards with almost 25-30% growth in
new cardholders. The latest innovation in credit cards is the introduction of a magnetic
slip in the card for use in withdrawing cash at the automatic teller machine (ATM), of
which abut 60000 are already in existence in the world. In India also ATMs have made
late appearance, but now spreading very rapidly. As per statistics published by RBI there
are 895 ATMs in India as at the end of the year 2001 but it is also regularly increasing.
Advantages of Credit Card The following are the advantages of credit cards: 1. The credit
card holders need not to carry either traveler‘s cheques or cash with them and they are
free from the security of cash. 2. Traveling facilities are available in hotels, restaurants
and airways to the cardholders. 3. Each card holder gets insurance facility which is up to
one lakh on ordinary insurance.
27. 27. 27 4. It has become a status symbol. Railway tickets are available on special
windows.Extra charges are made by the railway and the cancellation of tickets is also
allowed and the amount is directly credited in the bank account of the card holder. 5. The
business of the card holder individuals or institution has been because the businessmen
are assured for the payment as the transactions have been finalized on the basis of credit
cards. 6. Credit cards enhance the credit of banks and the credit of new customers and
consumers is enhanced. 7. Deposits in saving and current accounts increase. 8. Service
charges on credit card increase the profitability of banks. Disadvantages of Credit cards
its own Disadvantages as discussed below: 1. Credit card is a contact in advance and if
the card holder does not make payment,the recovery by bank becomes difficult. 2. Card
holders spend in excess of their incomes and it poses the problem of recovery form them.
3. Bank‘s profitability is adversely affected due to increase in overdraft of cardholders
and difficulties in repayment by them. Future of Credit Cards In India this facility has
 increased the business activities; middle and upper middle classes are availing this
facility. It has become popular and status symbol in our country hence the prospects of
credit cards are bright. Smart Cards A smartcard resembles a credit card except that it has
a microchip embedded within it, which allows the smartcard to store information and
sometimes to even perform simple calculations. Common smartcard chips typically holds
about 8,000 bytes(characters) of information, which enables the smartcard to perform a
variety of functions such as identification , storing bank account information an holding
digital cash. A number of smartcards are on the market today, and these are used in a
wide range of applications. Mondex has received a lot of recognition in the financial
press, and several banks
28. 28. 28 have already conducted trials with its smartcard. Wells Fargo & Co., a major
California bank based in San Francisco, will issue Mondex smartcards to all of its online
banking customers in 2998, a number which could reach into the hundreds of thousands.
Because MasterCard International holds a 51% stake in Mondex, it could become the
defacto international standard for bank-issued smartcards. Smart Cards – The new
Innovation A smart card is a miniaturized personal computer (PC), which can be used for
a dazzling array of applications, and also as ‗digital‘ cash. It contains a micro
processor,memory and tailored software. The software security system used for these
cards is almost as fool proof as those used by nuclear establishments and leading
international banks! Smart cards can manage security procedures using passwords and
state-of-the-art encryption techniques. Further, identity traits such as digitized photos,
signatures and fingerprints being placed on the card make it fraud- proof.
29. 29. 29 1.9 HISTORY OF E- BANKING The precursor for the modern home online
banking services were the distance banking services over electronic media from the early
'80s. The term online became popular in the late '80s and refers to the use of a terminal,
keyboard and TV (or monitor) to access the banking system using a phone line. ‗Home
banking‘ can also refer to the use of a numeric keypad to send tones down a phone line
with instructions to the bank. Online services started in New York in 1981 when four of
the city‘s major banks (Citibank, Chase Manhattan, Chemical and Manufacturers
Hanover) offered home banking services using the videotex system. Because of the
commercial failure of videotex these banking services never became popular except in
France where the use of videotex (Minitel) was subsidised by the telecom provider and
the UK, where the Prestel system was used. The UK‘s first home online banking services
were set up by the Nottingham Building Society (NBS) in 1983 ("History of the
Nottingham" Retrieved on 2007-12-14.). The system used was based on the UK's Prestel
system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400)
connected to the telephone system and television set. The system (known as 'Homelink')
allowed on-line viewing of statements, bank transfers and bill payments. In order to make
bank transfers and bill payments, a written instruction giving details of the intended
recipient had to be sent to the NBS who set the details up on the Homelink system.
Typical recipients were gas, electricity and telephone companies and accounts with other
banks. Details of payments to be made were input into the NBS system by the account
holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving
details of the payment was sent to the account holder. BACS was later used to transfer
the payment directly. Stanford Federal Credit Union was the first financial institution to
offer online internet banking services to all of its members in Oct, 1994.
30. 30. 30 1.10 USAGE OF E-BANKING The rise in the e-commerce and the use of internet
in its facilitation along with the enhanced online security of transactions and sensitive
information has been the core reason for the penetration of online banking in everyday
life. According to the latest official figures from the office of National Statistics ( ONS
2007) indicate that subscriptions to the internet has grown more than 50% from 25
million in 2005 to 45million in 2007 in India. It has also been estimated that 60% of the
population in India use internet in their daily lives. The fundamental shift towards the
involvement of the customer in the financial service provision with the help of the
technology especially internet has helped to reduce the costs of financial institutions as
well as helped client to use the service at anytime and from virtually anywhere with
access to an internet connection. The use of electronic banking has removed personnel
that facilitate the transactions and has placed additional responsibilities on the customers
to transact with the service. The computerization of the banking operations has made
maximum impact on:- 1)Internal Accounting System 2)Customer service
3)Diversification of system
31. 31. 31 1.11 INTERNET BANKING VERSUS TRADITIONAL BANKING In spite of so
many facilities that Internet banking offers us, we still seem to trust our traditional
method of banking and is reluctant to use online banking. But here are few cases where
Internet banking will turn out to be a better option in terms of saving your money. 'Stop
payment' done through Internet banking will not cost any extra fees but when done
through the branch, the bank may charge you Rs 50 per cheque plus the service tax.
Through Internet banking, you can check your transactions at any time of the day, and as
many times as you want to. On the other hand, in a traditional method, you get quarterly
statements from the bank and if you request for a statement at your required time, it may
turn out to be an expensive affair. The branch may charge you Rs 25 per page, which
includes only 30 transactions. Moreover, the bank branch would take eight days to
deliver it at your doorstep. If the fund transfer has to be made outstation, where the bank
does not have a branch,the bank would demand outstation charges. Whereas with the help
of online banking,it will be absolutely free for you. As per the Internet and Mobile
Association of India's report on online banking 2006, "There are many advantages of
online banking.It is convenient, it isn't bound by operational timings, there are no
geographical barriers and the services can be offered at a miniscule cost."
32. 32. 32 1.12Challenges and indicators of e-banking  Infrastructural barriers are one of the
challenges for implementation and development of e-banking.  Knowledge barriers are
one of the challenges for implementation and development of e- banking.  Legal and
security issues are one of the challenges for implementation and development of e-
banking.  Social and cultural barriers are one of the challenges for implementation and
development of e-banking.  Economic factors are one of the challenges for
implementation and development of e- banking.  Management and banking issues are
one of the challenges for implementation and development of e-banking.
33. 33. 33 1.13E-Banking Transactions Informational website Informational websites provide
customers access to general information about the financial institution and its products or
services. Risk issues examiners should consider when reviewing informational websites
include:-  Potential liability and consumer violations for inaccurate or incomplete
information about products, services, and pricing presented on the  Potential access to
confidential financial institution or customer information if the website is not properly
 isolated from the financial institution‘s internal network;  Potential liability for
spreading viruses and other malicious code to computers communicating with the
institution‘s website; and  Negative public perception if the institution‘s on-line services
are disrupted or if its website is defaced or otherwise presents inappropriate or offensive
material.
34. 34. 34 Translational Website Transactional websites provide customers with the ability to
conduct transactions through the financial institution‘s website by initiating banking
transactions or buying products and services. Banking transactions can range from
something as basic as a retail account balance inquiry to a large business-to-business
funds transfer. E-banking services, like those delivered through other delivery channels,
are typically classified based on the type of customer they support. Since transactional
websites typically enable the electronic exchange of confidential customer information
and the transfer of funds, services provided through these websites expose a financial
institution to higher risk than basic informational websites. Wholesale e-banking systems
typically expose financial institutions to the highest risk per transaction, since
commercial transactions usually involve larger dollar amounts. In addition to the risk
issues associated with informational websites, examiners reviewing transactional e-
banking services should consider the following issues:  Security controls for
safeguarding customer information;  Authentication processes necessary to initially
verify the identity of new customers and authenticate existing customers who access e-
banking services;  Liability for unauthorized transactions;  Losses from fraud if the
institution fails to verify the identity of individuals or businesses applying for new
accounts or credit on-line;  Possible violations of laws or regulations pertaining to
consumer privacy, anti-money laundering, anti-terrorism, or the content, timing, or
delivery of required consumer disclosures; and  Negative public perception, customer
dissatisfaction, and potential liability resulting from failure to process third-party
payments as directed or within specified time frames, lack of availability of on-line
services, or unauthorized access to confidential customer information during transmission
or storage.
35. 35. 35 1.14Technology in Banking The introduction of new technologies has radically
transformed banking transactions. In the past, customers had to come physically into the
bank branch to do banking transactions including transfers, deposits and withdrawals.
Banks had to employ several tellers to physically make all those transactions. Automatic
Teller Machines (ATMs)were then introduced which allowed people to do their banking
on their own, practically anytime and anywhere. This helped the banks cut down on the
number of tellers and focus on managing money. The Internet then brought another venue
with which customers could do banking, reducing the need for ATMs. Online banking
allowed customers to do financial transactions from their PCs at home via Internet. Now,
with the emergence of Wireless Application Protocol (WAP) technology, banks can use
the infrastructure and applications developed for the Internet and move it to mobile
phones. Now people no longer have to be tied to a desktop PC to do their banking. The
WAPinterface is much faster and convenient than the Internet, allowing customers to see
account details, transaction details, make bill payments, and even check credit card
balance. The cost of the average payment transaction on the Internet is minimum. Several
studies found that the estimated transaction cost through mobile phone is16 cents, a fully
computerized bank using its own software is 26 cents, a telephone bank is 54 cents, a
 bank branch, $1.27, an ATM, 27 cents, and on the Internet it costs just 13 cents. As a
result, the use of the Internet for commercial transactions started to gain momentum
in1995. More than 2,000 banks in the world now have transactional websites and the
growth of online lending solutions is making them more cost efficient. Recent
developments are now encouraging banks to target small businesses as a separate lending
category online. Banks are increasingly building payment infrastructure with various
security mechanisms(SSL, SET) because there is tremendous potential for profit, as more
and more payments will pass through the Internet. However, the challenge for banks is to
offer a payments back-bone system that will be open enough to support multiple payment
instruments (credit cards, debit cards, direct debit to accounts, e-checks, digital money
etc.) and scalable enough to allow for a stable service regardless of the workload.
36. 36. 36 The market for Electronic Bill Presentment and Payment (EBPP) is growing.
According to a study, 18 million households in the US are expected to pay their bills
online by 2003compared to 2 million households in 2001. As more number of bill payers
are getting online, several banks are making efforts to find ways to meet the growing
needs of EBPP.Established banks can emerge as key online integrators of customer bills
and can capitalize on this high potential market. Growing with the popularity of EBPP is
also the paying of multiple bills at a single site known as bill aggregation. Offering online
bill payment and aggregation will increase the competitiveness and attractiveness of e-
banking services and will allow banks to generate service-fee income from the billers. In
the B2B segment, the customer value proposition for online bill payment is more
compelling. B2B e-commerce is expected to grow from $406 bn in 2000 to $2.7 tn
by2004, and more than half of all transactions will be routed through online
B2Bmarketplaces. There is a need for automated payment systems to reduce cost and
human error, and enhance cash-flow management. To meet this need, a group of banks
and non-financial institutions led by Citibank and Wells Fargo have formed a company
called Financial Settlements Matrix (FSMx). It provides business buyers and sellers with
access to secure payment processing, invoicing and other services that participating
financial services firms offer. A B2B marketplace would provide minimum value to its
customers if it just matches buyers and sellers, leaving the financial aspects of
transactions to be handled through traditional non- Internet channels. This new form of
collaboration between partners with complementary core competencies may prove to be
an effective business model for e-business.
37. 37. 37 1.15 The E-Banking Strategies Though e-banking offers vast opportunities, yet
even less than one in three banks have ane- banking strategy in place. According to a
study, less than 15 percent of banks with transactional websites will realize profits
directly attributable to those sites. Hence, banks must recognize the seriousness of the
challenge ahead and develop a strategy that will enable them to leverage the opportunities
presented by the Internet. No single e-banking strategy is right for every banking
company. But whether they adopt an offensive or a defensive posture, they must
constantly re-evaluate their strategy. In the fast-paced e-economy, banks have to keep up
with the constantly evolving business models and technology innovations of the Internet
space. Early e-business adopter like Wells Fargo not only entered the e-banking industry
first but also showed flexibility to change as the market developed. Not many banks have
been as e-business-savvy. But the pressure is now building for all banks to develop sound
e-business strategies that will attract and retain increasingly discriminating customers.
 The major problem with the banks, which have already invested huge amounts in their
online initiatives, is that their online offerings remain unprofitable. Though banks have
enrolled some existing customers in their online programs, they are not getting customers
in large numbers. This has made banks wonder whether there is any value in the online
channel. Just enrolling customers for online banking may not be sufficient until and
unless they use the site actively. Banks must make efforts to increase their site usage by
customers and effectively co-ordinate the online channel with branches and call
centers.Then only they will be able to derive maximum value that includes cost
reduction, cross-selling opportunities, and higher customer retention. Customers have
some rational reasons for staying offline. Some of these reasons include usability features
of the site, concerns about security and frequent complaints that signing up is
complicated and time-consuming. Banks can solve these problems by refocusing
investment on improving the site's basic functionality and user-friendliness, and avoiding
advanced features that most customers neither understand nor value. Banks must make
efforts to familiarize customers with their sites and show them how easy and efficient the
online channel is to use.
38. 38. 38 Integrating the online channel with the rest of the bank is another important issue
that banks must focus upon. This is important because nearly all the value of the online
channel is realized offline _ in cross sales completed in other channels and in cost
reductions. An actively used online channel should also serve as a medium to sell
banking services for the branch staff, the call center, and the relationship
manager.Integrated channels working together are far more effective than a group of
channels working without any coordination. To facilitate this integration, banks must
formulate paths that people in various customer segments are likely to take among the
channels. The interactions in each channel can then be worked around these paths. For
example, a call center representative must work out which channels the customer used
before coming to her, and which channels the customer is likely to visit next. Each
channel must have entry and exit points that must welcome customers and then send to
other channels. Hence, the overall goal of banks is to create a seamless multichannel
experience. On the other hand, those banks that are planning to build their online
businesses will have to understand several strategic issues like do they have the right
business model for e- banking? How should they price their e-banking products and
services? Bankers planning to move into e- banking have to explore different options,
make investments and have to develop a variety of partnerships. They have to put their
time and efforts to identify the best opportunities. In the case of traditional banks, if they
are too aggressive in using price incentives to build their e-business, they risk the
profitability of their traditional business. However, if they do not offer sufficient price
incentives for customers to bank online, their efforts to build a sound e-banking business
may not fructify. Banks have to be creative in rethinking organizational structures and
management processes. Traditional banks that are conservative in nature may find it
difficult to attract and retain online talent. Moreover, getting people in the traditional
business to help build an e-enterprise would not be an easy task. To make all this happen,
requires a major revision of incentive systems, planning and budgeting processes, and
management roles.Banks can exploit the opportunities
39. 39. 39 provided by the Internet if they demonstrate courage,use their imagination, and
take decisive action. While most of the banks have started focusing on e-banking
 activities, a new challenge in the form of mobile banking has emerged. M-Banking is
both an additional opportunity for banks to offer their online services and an additional
channel from which to access new customers and cross-sell to existing customers.
Rapidly changing lifestyles of customers and their demand for more speed and
convenience has subdued the role of branch banking to a certain extent. With the
proliferation of new technologies, disintermediation of traditional channels is being
witnessed. Banks can go beyond their traditional role as a channel for banking/financial
services and can become providers of personalized information. They can successfully
leverage m- banking to:  Provide personalized products and services to specific
customers and thus increase customer loyalty.  Exploit additional sources of revenue
from subscriptions, transactions and third- party referrals. M-Banking gives banks the
opportunity to significantly expand their customer relationships provided they position
themselves effectively. To leverage these opportunities, they must form structured
alliances with service affiliates, and acquire competitive advantage in collecting,
processing and deploying customer information.
40. 40. 40 Company Profile 2.1 STATE BANK OF INDIA(SBI) SBI Internet Banking
service has made it completely easy for the customers to carry out a number of activities
with their bank account. Today, you can check your account balance, get account
statement, make third party transfer or keep track of your transactions with the help of
SBI Bank Internet banking facility. Gone are the days when you have to go to your
nearest branch just to update your passbook or make balance enquiry. SBI Bank online
banking service allows the customers to enjoy a number of online products and services
that include;  E-Ticketing  SBI E-Tax  Bill Payment  E-Payment  Fund Transfer 
Third Party Transfer  Demand Draft  Cheque Book Request  Account Opening
Request  Demat Account Statement  Donation OnlineSBI is the SBI Internet Banking
website and it offers online access to bank accounts of retail and corporate customers
from anywhere and at anytime. This banking site is developed by highly talented
professionals using the most advanced technologies and tools. OnlineSBI supports
unified and safe access to bank accounts with over 11,000 branches of the bank across the
country. The site is certified by Verisign, which is the leading Internet certification
authority in the world. With the help of this website, the bank offers a number of
corporate and retail banking products and value added services without any hassle.
41. 41. 41 In order to enjoy the online banking services offered by SBI, you are first required
to have a bank account with the bank. Then only you can apply for internet banking
facility. SBI Internet banking application form is easily available at any branch of the
bank. In this application form, you will have to enter your account details, personal
details and the address where you would like your internet banking kit to be posted. If the
net banking kit is available with the bank branch at the time of your application then the
bank will offer it immediately. This kit contains your initial Internet banking User ID and
Password through which you can login to your account. SBI Net Banking activation takes
24 hours and you are required to make your login with the user ID and password after 24
hours from when you get the internet banking kit from the bank. You can also search for
several internet banking branches of SBI Bank with the help of OnlineSBI. It is
recommended that you change your username and password as soon as you login with the
details provided in the Internet banking kit.
42. 42. 42 2.2 General Information:  You should register for OnlineSBI with the branch
where you maintain the account.  If you maintain accounts at more than one branch, you
need to register at each branch separately.  Normally OnlineSBI services will be open to
the customer only after he/she acknowledges the receipt of password.  We invite you to
visit your account on the site frequently for transacting business or viewing account
balances. If you believe that any information relating to your account has a discrepancy,
please bring it to the notice of the branch by e-mail or letter.  In a joint account, all
account holders are entitled to register, as users of OnlineSBI, but transactions would be
permitted based on the account operation rights recorded at the branch. (To begin with
the services will be extended only to single or Joint E or S accounts only).  All accounts
at the branch whether or not listed in the registration form, will be available on the
OnlineSBI. However the applicant has the option to selectively view the accounts on the
OnlineSBI.
43. 43. 43 2.3 Security:  The Branch where the customer maintains his/her account will
assign: 1. User-id & 2. Password  The User-id and Password given by the branch must
be replaced by User Name and Password of customer's choice at the time of first log-on.
This is mandatory.  Bank will make reasonable use of available technology to ensure
security and to prevent unauthorised access to any of these services. The OnlineSBI
service is VERISIGN certified which guarantees, that it is a secure site.It means that 1.
You are dealing with SBI at that moment. 2. The two-way communication is secured with
256-bit SSL encryption technology, which ensures the confidentiality of the data during
transmission.  These together with access control methods designed on the site would
afford a high level of security to the transactions you conduct.SBI will soon be
implementing PKI/Digital Signature.  You are welcome to access OnlineSBI from
anywhere anytime. However, as a matter of precaution, customers may avoid using PCs
with public access.  There is no way to retrieve a password from the system. Therefore
if a customer forgets his/her password, he/she must approach the branch for re-
registration.
44. 44. 44 2.4 Bank's terms: 1. All requests received from customers are logged for backend
fulfillment and are effective from the time they are recorded at the branch. 2. Rules and
regulations applicable to normal banking transactions in India will be applicable mutatis
mutandis for the transactions executed through this site. 3. The OnlineSBI service cannot
be claimed as a right. The bank may also convert this into a discretionary service
anytime. 4. Dispute between the customer and the Bank in this service is subject to the
jurisdiction of the courts in the Republic of India and governed by the laws prevailing in
India. 5. The Bank reserves the right to modify the services offered or the Terms of
service of OnlineSBI. The changes will be notified to the customers through a
notification on the Site. 2.5 Customer's obligations: 1. The customer has an obligation to
maintain secrecy in regard to Username & Password registered with the Bank. The bank
presupposes that login using valid Username and Password is a valid session initiated by
none other than the customer. 2. Transaction executed through a valid session will be
construed by SBI to have emanated from the registered customer and will be binding on
him / her. 3. The customer will not attempt or permit others to attempt accessing the
OnlineSBI through any unlawful means.
45. 45. 45 2.6 Do's & Don'ts:  The customer should keep his/her ID and password strictly
confidential and should not divulge the same to any other person. Any loss sustained by
 the customer due to non- compliance of this condition will be at his/her own risk and
responsibility and the Bank will not be liable for the same in any manner.  The customer
is free to choose a password of his/her own for OnlineSBI services. As a precaution a
password that is generic in nature, guessable or inferable personal data such as name,
address, telephone number, driving license, date of birth, etc. is best avoided. Similarly it
is a good practice to commit the password to memory rather than writing it down
somewhere.  It may not be safe to leave the computer unattended during a valid session.
This might give access to your account information to others.
46. 46. 46 2.7 SWOT Analysis (SBI Bank) Strengths  Brand name  Market Leader 
Wide Distribution Network  Government Owned  Diversified Portfolio
47. 47. 47 Weaknesses  Minor hindrances  Hierarchical management  Lags
modernisation Opportunities  Merger of associate banks with SBI  Opportunities for
public sector banks  New Branches and ATM's  Expansion on Foregin soil Threats 
Advent of MNC banks  CRM  Private banks venturing into the rural  Employee
Strike
48. 48. 48 Q1)Do you have knowledge on E-banking? YES NO Yes 90 No 10
49. 49. 49 Q2)Do you use E-Banking? Yes 75 No 25 YES NO
50. 50. 50 Q3)How oftenly do you use E-banking? Daily 25 Weekly 20 Monthly 35 Never 20
0 5 10 15 20 25 DAILY WEEKLY MONTHLY NEVER
51. 51. 51 Q4)Which bank you prefer? SBI 35 ICICI 25 HDFC 20 AXIS 10 OTHER 10 0 5
10 15 20 25 30 35 SBI ICICI HDFC AXIS OTHER
52. 52. 52 Q5)Which of the following E-Banking service you are aware of? Internet Banking
33 Mobile Banking 19 Phone Banking 20 Debit Cards 28 0 5 10 15 20 25 30 35 Internet
Banking Mobile Banking Phone Banking Debit Cards
53. 53. 53 Q6)Do you feel E-banking System of the bank is customer friendly? YES 75 NO
25 YES NO
54. 54. 54 Q7)Do you think it saves time? YES 90 NO 10 YES NO
55. 55. 55 Q8)Do you think E-banking is safe? Yes 80 No 20 Yes No
56. 56. 56 Q9)How banks provide E-banking details to you? Via SMS 34 E-Mail 30
Brouchers 16 Others 20 0 5 10 15 20 25 30 35 Via SMS E-Mail Brouchers Others
57. 57. 57 Q10)Do you trust the security of online banking service? YES 70 NO 30 YES NO
58. 58. 58 Q11) Do you think human contact is important for banking relation? YES 55 NO
45 YES NO
59. 59. 59 Q12)What are the main disadvantage of visiting bank branch? WAITING 32
DISTANCE 43 Opening Times 15 Quality of Service 10 0 5 10 15 20 25 30 35 40 45
WAITING DISTANCE OPENING TIMES QUALITY OF SERVICE
60. 60. 60 Q13)Have you ever visited your bank branch since you started using online
banking? Yes 40 No 60 YES NO
61. 61. 61 Q14)Are you satisfied with using E-banking? YES NO Yes 77 No 23
62. 62. 62 3.1 Data Collection Data collection is the process of gathering and measuring
information on variables of interest, in an established systematic fashion that enables one
to answer stated research questions, test hypotheses, and evaluate outcomes. The data
collection component of research is common to all fields of study including physical and
social sciences, humanities, business, etc. While methods vary by discipline, the
emphasis on ensuring accurate and honest collection remains the same. The importance
of ensuring accurate & appropriate data collection Regardless of the field of study or
 preference for defining data (quantitative, qualitative), accurate data collection is
essential to maintaining the integrity of research. Both the selection of appropriate data
collection instruments (existing, modified, or newly developed) and clearly delineated
instructions for their correct use reduce the likelihood of errors occurring. Consequences
from improperly collected data include  inability to answer research questions accurately
 inability to repeat and validate the study  distorted findings resulting in wasted
resources  misleading other researchers to pursue fruitless avenues of investigation 
compromising decisions for public policy  causing harm to human participants and
animal subjects While the degree of impact from faulty data collection may vary by
discipline and the nature of investigation, there is the potential to cause disproportionate
harm when these research results are used to support public policy recommendations.
63. 63. 63 3.2DATA ANALYSIS Keeping in view the nature of requirements of the study to
collect all the relevant information regarding the extent of awareness of the customers
using E-banking facilities offered by bank, direct personal interview method with
structured questionnaire was adopted for the collection of primary data. Secondary data
has been collected through the various internet sites by surfing on Internet and from the
records available with the bank. SECONDARY DATA:  Articles on E-Banking taken
from journals, magazines published from time to time.  Through internet. PRIMARY
DATA Questionnaire was used to collect primary data from respondents. The
questionnaire was structured type and contained questions relating to different
dimensions of e-banking preferences among service class such as level of usage, factors
influencing the usage of e-banking services, benefits accruing to the users of e-banking
services,problems encountered. An attempt was also made to elicit reasons for its non-
usage.The questions included in the questionnaire were open- ended and offering
multiple choices. SAMPLING SIZE It indicates the numbers of people to be surveyed.
Though large samples give more reliable results than small samples but due to constraint
of time and money, the sample size was restricted to 100 respondents. The respondents
belong to different peoples. Area:-Vasant Leela,Thane(W) Date:-8/8/2012-10/8/2012
Approached:-120 Respond:-100 Rejection:-Nil
64. 64. 64 4.1Conclusion This study attempted to identify key quality attributes of internet
banking services by analyzing internet banking customers & their comments on banking
experience. The findings of this study show that despite of many advantages of online
banking. People still consider it as an alternative for analyzing their bank records.
Although every bank today provides the facility of online banking but most of people use
it only once a month. This reason is that in case of internet banking interpersonal
interaction with customers is seldom possible. Identification & measurement of
customer‘s expectations of the internet banking services provide a frame of reference &
their related quality dimension. The main factors which persuade people to use
onlinebanking are comfort & convenience & the facility which attracts them most is
quality& quantity of information. Therefore the implementation of quality initiatives
should begin with defining customer‘s need & preferences & their related quality
dimensionsThere is still a lot needed for the banking system to make reforms and train
theircustomers for using internet for their banking account. Going through the survey
themain problem lies that still customer have a fear of hacking of accounts and thus donot
go on for internet banking. Banks are trying their level best by providing the best security
options to the customers but then to there is lot of factors which betrays a customer from
 opening an internet bank account. Banks are providing free internet banking services also
so that the customers can be attracted. By asking the bank employs we came to know that
maximum numbers of internet bank account holders are youth and business man. E-
Banking is an innovative tool that is fast becoming a necessity. It is a successful strategic
weapon for banks to remain profitable in a volatile and competitive market place of
today. If proper training should be given to customer by the bank employs to open an
account will be beneficial secondly the website should be made friendlier from where the
first time customers can directly make and access their accounts. In future, the
availability of technology to ensure safety and privacy of e-transactions and the RBI
guidelines on various aspects of internet banking will definitely help in rapid growth of
internet banking in India.
65. 65. 65 4.2Suggestion We can see the time is changing and we the passage of time people
are acceptingtechnology there is still a lot of perceptual blocking which hampers the
growth it‘s thenormal tendency of a human not to have changes work on the old track,
that‘s alsoone of the reason for the slow acceptance of internet banking accounts.  Banks
should obey the RBI norms and provide facilities as per the norms, whichare not being
followed by the banks. While the customer must be given theprompt services and the
bank officer should not have any fear on mind to providethe facilities as per RBI norms
to the units going sick.  Internet banking facility must be made available in all branches
of these twoBanks.  Each section of these Banks should be computerized even in rural
areas also.  Personalized banking should be given a thrust as more and more banks
areachieving in usual services.  Covering up the towns in rural areas with ATMs so that
the people in those areascan also avail better services.  Prompt dealing with permanent
customers and speedy transactions withoutharassing the customers.  Fair dealing with
the customers. More contributions from the employees of thebank. The staff should be
co-operative, friendly and must be capable of understanding the problems of the
customers.