A STUDY ON CUSTOMER AWARENESS ON E-BANKING SERVICES AT STATE

BANK OF INDIA, MADURAI

EXECUTIVE SUMMARY
E-banking is fast becoming a norm in the developed world, and is being implemented
by many banks in developing economies around the globe. The main reason behind this
success is the numerous benefits it can provide, both to the banks and to customers of
financial services. For banks, it can provide a cost effective way of conducting business
and enriching relationship with customers by offering superior services, and innovative
products which may be customized to individual needs. For customers it can provide a
greater choice in terms of the channels they can use to conduct their business, and
convenience in terms of when and where they can use e- banking.
Over the last decade India has been one of the fastest adopters of information
technology, particularly because of its capability to provide software solution to organiz
ationsaround theworld. This capability has provided a tremendous impetuous to the
domestic banking industry in India to deploy the latest in technology, particularly in the
Internet banking and e-commerce areas. Technology is playing a major role in
increasing the efficiency, courtesy and speed of customer service. An Online Banking
user is expected to perform transactions online such as Checking account balance and
transaction history, Paying bills, Transferring funds between accounts, Requesting
credit card advances, ordering checks, Managing investments and stocks trading.
From a bank‟s perspective, using the internet is more efficient than using other
distribution mediums because banks are looking for an increased customer base.
Moreover Internet delivery offers customized service to suit the needs and the likes of
each user. Mass customization happens effectively through Online Banking. It reduces
cost and replaces time spent on routine errands with spending time on business errands.
Online Banking means less staff members, smaller infrastructure demands, compared
with other banking channels. From the customers‟ perspective, Online Banking
provides a convenient and effective way to manage finances that is easily accessible 24
hours a day, seven days a week. In addition information is up to date. Nevertheless
Online Banking has disadvantages for banks like how to work the technology, set-up
cost, legal issues, and lack of personal contact with customers. And for customers there
are security and privacy issue

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CHAPTER I

INDUSTRYANALYSIS

1. INDUSTRY ANALYSIS

1.1. INTRODCTION OF BANKING INDUSTRY

BANKING:
The word "BANK" is derived from a Latin word 'Bancus' or 'Banque', which means a
bench. In the early days the European moneylenders and moneychangers used to sit on
the benches and exhibit coins of different countries in big heaps for the purpose of
changing and lending money,:
As per Banking Regulation Act 1949 Section 5(b)

"Banking means, accepting for the purpose of lending or investment, of deposits of

money from the public, repayable on demand or otherwise, and withdrawal by cheque,
draft, or otherwise."
The banking industry is and always has been one of the most important aspects of all
industries. The reason being, every other industry needs banks to take part in any
investments or financial movements as a way to better their position in their industries.
The industry analysis will look at how and why the banking industry has been able to
hold this position for so long through the Competitive Land scape. Banking in India has
a long and elaborate history of more than 200 years. The beginning of this industry can
be traced back to1786, when the country‟s first bank, Bank of Bengal, was established.
But the industry changed rapidly and drastically, after the nationalization of banks
in1969. As a result, the public sector banks began experiencing numerous positive
changes and enormous growth. Then came much-talked-about liberalization and
economic reforms that allowed banks to explore new business opportunities and not just
remain constrained to generating revenues from mere borrowing and lending. This
provided the Indian banking scenario a remarkable facelift that only continues to get
better with time. However, even today, despite the foray of foreign banks in the
country, nationalized banks continue to be biggest lenders in the country. This is
primarily due to the size of the banks and the penetration of the networks.

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1.2. INDIAN BANKING SCENARIO

The Banking industry comprises of segments that provide financial assistance and
advisory services to its customers by means of varied functions such as commercial banking,
wholesale banking,personal banking, internet banking,mobile banking,credit unions,inv
estment banking and the like.
With years, banks are also adding services to their customers. The Indian banking
industry is passing through a phase of customers market. The customers have more
choices in choosing their banks. A competition has been established within the banks
operating in India.
With stiff competition and advancement of technology, the services provided by
banks have become more easy and convenient. The past days are witness to an hour
wait before withdrawing cash from accounts or a cheque from north of the country
being cleared in one month in the south.
Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in
India on modern lines started with the establishment of three presidency banks under
Presidency Bank‟s act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras.
The commercial banking structure in India consists of: Scheduled Commercial
Banks &Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking
as "accepting, for the purpose of lending or investment of deposits of money from the
public, repayable on demand and withdrawal by cheques, draft, order or otherwise.
"The arrival of foreign and private banks with their superior state-of-the-art technology
based services pushed Indian Banks also to follow suit by going in for the latest
technologies so as to meet the threat of competition and retain customer base.
The evolution of IT services outsourcing in the Indian banks has presently moved on to
the level of Facilities Management (FM). Banks now looking at business process
management (BPM) to increase returns on investment, improve customer relationship
management (CRM) and employee productivity. For, these entities sustaining long-
term customer relationship management (CRM) has become a challenge with almost
everyone in the market with similar products.

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1.3. CHANGES IN THE STRUCTURE OF BANKS

The financial sector reforms ushered in the year 1991 have been well calibrated and
timed to ensure a smooth transition of the system from a highly regulated regime to a
market economy. The first phase of reforms focused on modification in the policy
framework, improvement in financial health through introduction of various prudential
norms and creation of a competitive environment. The second phase of reforms started
in the latter half of 90s, targeted strengthening the foundation of banking system,
streamlining procedures, upgrading technology and human resources development and
further structural changes. The financial sector reforms carried out so far have made the
balance sheets of banks look healthier and helped them move towards achieving global
benchmarks in terms of prudential norms and best practices.

Technology is expected to be the main facilitator of change in the financial

sector.Implementation of technology solutions involves huge capital outlay. Besides the
heavy investment costs, technology applications also have a high degree of
obsolescence. Banks will need to look for ways to optimize resources for technology
applications. In this regard, global partnerships on technology and skills sharing may
help.

The pressure on capital structure is expected to trigger a phase of consolidation in the

banking industry. Banks could achieve consolidation through differentways. Mergers
between public sector banks or public sector banks and private banks could be the next
logical thing /development to happen as market players tend to consolidate their
position to remain in competition. Public Sector Banks had, in the past, relied on
Government support for capital Augmentation. However, with the Government making
a conscious decision to reduce it's holding in Banks, most Banks have approached the
capital market for raising resources. It is expected that pressures of market forces would
be the determining factor for the consolidation in the structure of these banks. If the
process of consolidation through mergers and acquisitions momentum, that could see
the emergence of a few large Indian banks with international character. There could be
some large national banks and several local level banks
.

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1.4. ROLE OF THE RESERVE BANK IN THE BANKING SECTOR

The Reserve Bank of India, being the central bank of the country, has numerous
monetary and financial functions to overlook. Even in a liberalized country such as the
United States, the Federal Reserve has similar functions to perform. This implies that
the market mechanism should not be given the sole rein to runs the banking industry
and setting the market rates. The functions of the Reserve Bank which have a direct
bearing on the banking sector are:

1. Financial Supervision

This aspect of the Reserve Bank is under the aegis of a Board for Financial Supervision
(BFS). The objective of the BFS is: “to undertake consolidated supervision of the
financial sector comprising commercial banks, financial institutions and non banking
finance companies.” The functions that come under the above mentioned objectives are:
a. Restructuring of the system of bank inspections.
b. Introduction of off-site surveillance
c. Strengthening of the role of statutory auditors and
d. Strengthening of the internal defences of supervised institutions.
Thus, the BFS does such acts as the supervising financial institutions, consolidated
accounting, looking at legal issues in bank frauds, providing assessments of
nonperforming assets and maintaining a supervisory rating model for banks.

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2. Monetary Authority

The Reserve Bank is the monetary authority of the country. This implies that the
Reserve Bank formulates implements and monitors the monetary policy of the country.
The various monetary policies involves the availability of liquidity in the economy the
amount of money supply to the economy), and setting the interest rates in the country.
These rates include the Statutory Liquidity Ratio (SLR), the Cash Reserve Ratio (CRR)
and the Cash Adequacy Ratio (CAR) among others. By this function, the Reserve Bank
maintains price stability in the economy and ensures that cash flow to various
(important) sectors is maintained. In relation to the banking industry, the setting of
interest rates is of utmost importance. This limit prescribes the conduct of the banks in
the economy. It also acts as an entry barrier to the sector.

3. Regulator of the Banking System

Being the regulator of the banking, the Reserve Bank “prescribes a set of broad
parameters from within which the country‟s banking and banking and financial System
functions". The specific aims of financial regulation are usually: a)To enforce
applicable laws.
b) To prosecute cases of market misconduct, such as insider trading.
c)To license providers of financial services.
d) To protect clients, and investigate complaints.
e) To maintain confidence in the financial system.
It is evident from these points that the Reserve Bank does have an amount of control
over the functioning and the conduct of the banks in the sector. The Reserve Bank and
SEBI (Securities and Exchange Bureau of India) thus can even force banks to withdraw
from the sector in the case of occurrence of unfair practices.

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4. Banker to the banks

The Reserve Bank acts as the banker to the various banks in the country and maintains
banking accounts to all the scheduled banks in the country

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Table.1.1

BANKS IN INDIA

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CHAPTER II
COMPANY ANALYSIS
2.1. COMPANY PROFILE

The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2nd June 1806.
Three years later the bank received its charter and was redesigned as the Bank of
Bengal on 2nd January 1809. The Bank of Bombay on the 15th April 1840 and the
Bank of Madras on 1st July 1843 followed the Bank of Bengal. These three banks were
governed by Royal Charter, which were revised from time to time187. 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 business of the banks was initially confined to discounting of bills, keeping cash
accounts, receiving deposits and issuing and circulating cash notes. Loans were
restricted to Rs.1 lakh and the period of accommodation confined to three months only.
With the passing of the Paper Currency Act of 1861, the right of note issue of the
presidency banks was abolished and the Government of India assumed the sole power
of issuing paper currency from 1 March 1862. None of the three banks had till then any
branches although the charters had given them such authority. By 1876, the Bank of
Bengal had eighteen branches including its head office; seasonal branches and sub
agencies, the Banks of Bombay and Madras had fifteen each.

The Presidency Banks Act, which came into operation on 1st May 1876, brought the
three presidency banks under a common statute and the banks involved themselves in
the financing of practically every trading, manufacturing and mining activity in the
subcontinent. But the three banks were rigorously excluded from any business
involving foreign exchange, as it was feared that these banks enjoying government
patronage would offer unfair competition to the exchange banks, which had by then
arrived in India. This exclusion continued till the creation of the Reserve Bank of India
in 1935.

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The Presidency Banks of Bengal, Bombay and Madras with their 70 branches were
merged on 27th January 1921 to form the Imperial Bank of India190. They took on the
triple role of a commercial bank, a banker‟s bank and a banker to the government. The
establishment of the Reserve Bank of India as the central bank of the country in 1935
ended the quasi-central banking role of the Imperial Bank. The business of the banks
was initially confined to discounting of bills of exchange or other negotiable private
securities, keeping cash accounts and receiving deposits and issuing and circulating
cash notes. Loans were restricted to Rs. One lakh and the period of accommodation
confined to three months only. The earlier restrictions on its business were removed
and the bank was permitted to undertake foreign exchange business and executor and
trustee business for the first time. The Imperial Bank during the three and a half
decades of its existence recorded an impressive growth in terms of offices, reserves,
deposits, investments and advances, the increase in some cases amounting to more than
six-fold. The lofty traditions of banking which the Imperial Bank consistently
maintained and the high standard of integrity it observed in its operations inspired
confidence in its depositors that no other bank in India could perhaps then equal. When
India attained freedom, the Imperial Bank had a capital base (including reserves) of
Rs.11.85 crore, deposits and advances of Rs.275.14 crore and Rs.72,94 crore
respectively and a network of 172 branches and more than 200 sub offices extending all
over the country.

2.2 CORPORATE MISSION & VISION

Vision of State Bank of India

• MY SBI.

• MY CUSTOMER FIRST.

• MY SBI: FIRST IN CUSTOMER SATISFACTION.

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Mission of State Bank of India

• 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 valued.

• We will be of service even in the remotest part of our country.

• We will offer excellence in service to those abroad as much as we do to those in India.

• We will imbibe state of art technology to drive excellence.

Strengths of State Bank of India

• Largest commercial bank in the country with presence in all time zones of the world.

• Macroeconomic proxy for the Indian Economy.

• Has emerged as a Financial Services Supermarket

• Group holds more than 25 per cent market share in deposits and advances

• Large base of skilled manpower

• SBI Group has more than 115 million customers – Every tenth Indian is a customer.

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Values of SBI

The values of State Bank of India are:

• 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 early way out.

• We will do everything we can to contribute to the community we work in.

• We will nurture pride in India.

Information Technology
The Bank has adopted and is pursuing effectively its IT policy with the Aim of
achieving efficiency in operations, meeting customer and market Expectations and
staying ahead in competition. Thus, the technology initiatives would result in a)
Improved productivity,
b) Greatly reduced time-to-management in MIS,
c) Better risk management,
d) Efficient tracking of NPAs,
e) Better regulatory compliance,
f) Swifter reaction to market changes and customer needs, and
g) Reduction in transaction costs etc., to make the better functioning of SBI.

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2.3 ORGANISATIONAL STRUCTURE

ORGANISATION STRUCTURE AND MANAGEMENT

The management of the State Bank1 vests in a Central Board of Directors which
Consists of:
• A Chairman and a Vice-Chairman appointed by the Central Government in
consultation with the Reserve Bank of India.
• Two Managing Directors appointed by the Central Board of Directors with
the approval of the Central Government.
• Six directors to be elected in the prescribed manner by the shareholders
other than the Reserve Bank.
• Eight directors to be nominated by the Central Government in consultation
with the Reserve Bank of India to represent territorial and economic
interests in such a manner that not less than two of them have special
knowledge of the working of the cooperative institutions and of rural
economy and the others have experience in commerce, industry, banking
and finance;
• One director to be nominated by the Central Government;
• One director to be nominated by the Reserve Bank; and
• Two directors to be appointed to represent the officers and the staff of the
bank.
appointed as directors of the State Bank of India. Structural changes have been introduced by
the bank in order to re-orient the business according to changing conditions in the market.
One such step, for the first time, was initiated in 1971.In the year 1979, for the second time
the structural changes were implemented. The major organizational change in structure took
place in 1995, by the appointment of Mckinsey Consultants. Through changes were
introduced in strategies, structures, systems etc., in the organizational set up of SBI, as per
recommendations of the consultant committee.

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 The organization structure of State Bank of India at National Level is shown
in shown in Exhibit.3.1. The Chairman is the Head of the Central Management Committee
who is appointed by the Government of India in consultation with RBI. The Central
Management Committee consisting of two Managing Directors– one belonging to
Corporate Banking and the other to National Banking – and seven Deputy Managing
Directors representing the areas such as Banks, International Banking, Corporate
Development, Finance, Credit, Information Technology, and Information and Management
Audit. Along with the Committee the Chief Vigilance Officer at CGM cadre, will also work
under the Chairman. The Managing Director and Group Executive of the Corporate
Banking are responsible for the banking operations relating to big size companies and
corporations. The Corporate Account Group (CAG) under the leadership of the Managing
Director and Group Executive caters to a majority of top 100 companies/Corporations in
Indian ranked in the order of turnover and market capitalization. The credit sanction of
Rs.100 crore and above per company will fall under the jurisdiction of the managing
director. The National Banking Group is headed by a Managing Director and Group
Executive. This group consists of two distinct net works namely Development Banking and
Personal Banking Network and Commercial Banking Network. About 90 per cent of the
domestic deposits and 84 per cent of the domestic advances account for National Banking.
The State Bank of India has seven Associate Banks and 7 subsidiaries one of them is
Banking Subsidiary and the other six are
Non-Banking subsidiaries. One Deputy Managing Director will monitor the activities of all
Associate Banks and Subsidiaries at the national level. Another Deputy Managing Director
will coordinate and promote International Banking through a net work of 83 overseas
offices spread over in 33 countries covering all time zones. He is responsible for handling
the country‟s foreign trade and related business and providing foreign currency resources to
the Indian companies. The Deputy Managing Director (Corporate Development) is
concerned with the development and growth activities of the bank. He is responsible for
developing new products and schemes from time to time. The Accounting and Finance wing
is headed by a Deputy Managing Director. He is also called Chief Financial Officer. The
compilation of financial data, preparation of financial statement as per the regulations from
time to time and monitoring the performance of the bank on the financial front are his
responsibilities. One Deputy Managing Director will take care of Audit activities. The

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Deputy Managing Director, Information Technology is responsible for IT operations in the
Bank. Considering the importance of IT to promote efficiency in banking, this new position
is created in the organization system at the top management level. There is one Chief
Vigilance Officer reporting to the Chairman. The officer will look after the activities
including fraud detection and prevention of frauds. The disciplinary action against errant
officials up to the level of DGM will be taken by this office. The Chief Vigilance Officer
will maintain direct relations with Ministry of Finance, Government of India and Vigilance
Committee of Reserve Bank of India.

The State Bank of India has 14 Local Head Offices, which are also called
„Offices at the Circles‟ located at state head quarters. The heads of all LHOs are directly
responsible to the Chairman of the bank. A model organization chart of a circle is shown in
Exhibit No.3.2. The Circle Office has the jurisdiction of all Modules of the bank attached to
it. The sanctions of above Rs.25 lakh and below Rs.100 croreare processed at the Circle
Office. The Chief General Manager will be assisted by four Circle Officers at the DGM
cadre in the areas of bank development, credit, finance and vigilance. The General Manager
Personal and Development Banking is assisted by four Assistant General Managers (AGMs)
in the areas of administration, personal, development and expansion. The General Manager
Commercial and International Banking is assisted by four AGMs in the areas of premises,
computers, accounts and policy and decision making.

There are 58 Modules operated by the bank. Each module will be headed by Deputy
General Manager. The module organization chart of a Module is presented in Exhibit
No.3.3. The Modules will co-ordinate the activities of the bank through regional offices.
The heads of the regional offices and the branches headed by AGMs will directly report to
the DGM of a Module.

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 ORGANIZATION CHART AT NATIONAL LEVEL

CHAIRMAN

Corporate centre

Deputy Managing Deputy Managing Director & Chief

Director & Chief Credit Finance Officer
Officer

Deputy Managing
Deputy Managing Director
Director & Corporate
(Information & Management Audit)
Development Officer

Deputy Managing Civil Vigilance Officer

Director (Information
Technology)

Managing Director & Managing Director Deputy Managing Deputy Managing

Group Executive & Group Executive Director Director & Group
(Corporate Banking) (National Banking) (International Banks) Executive (Associates
Business groups & Subsidiaries)

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ORGANIZATION CHART AT STATE LEVEL

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The regional office will be headed by an Assistant General Manager and takes the
responsibility of co-ordination, developing and promoting the bank operations in a
region. All Branch Managers in a region will report directly to the AGM. The functions
such as credit support, sales planning, performance monitoring, general banking,
personnel and HRD and NPA management and recovery are managed at this office. A
model organization chart of regional office is shown in Exhibit No.3.4.

The organization chart of a branch is shown in Exhibit No.3.5. A branch is the first
level office having direct interaction with large number of customers. The branch
manager is the functional head of a branch. He is assisted by managers, officers and
clerks and the size of the staff is based upon the volume of business.

Hence, during pre-nationalization period, the banking was popularly known as class
banking era. The management of risk was very less in SBI as the major focus was on
organizational development and process management. There was strict adherence to
meticulous maintenance of accounts and inward looking approach in transacting the
credit approvals. The post nationalization period was also known as development
banking period.

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 ORGANIZATION CHART OF A BRANCH

BRANCH MANAGER

Manager Manager Manager Manager Manager

(Deposits) (Advances) (Accounts) (Agriculture) (International
Banking)

Officers Officers Officers Officers Officers

Officers Officers Officers Officers Officers

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CORPORATE GOVERNANCE
Corporate Governance facilitates effective management and control of business as this
ensures transparency and integrity in communication. This inturn, enables the
organizations to maintain a high level of business ethics and to optimize the value for
all its stakeholders.
Banks Philosophy on Code of Governance
State Bank of India has complied in all material respects, with the Corporate
Governance Code as per clause 49 of the Listing Agreement with the Stock Exchanges.
The State Bank of India is committed to the best practices in the area of Corporate
Governance. The objectives of Corporate Governance in State Bank of India are:
 To protect and enhance shareholder value.
 To protect the interest of all other stakeholders such as customers,
Employees and society at large.
 To ensure transparency and integrity in communication and to make
Available full, accurate and clear information to all concerned.
 To ensure accountability for performance and customer service and to
achieve excellence at all levels.
 To provide corporate leadership of highest standard for others to
emulate.
Thus, the SBI is well equipped with rendering its products and services to the
Customers at large.

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STATE BANK OF INDIA PRODUCTS AND SERVICES
State Bank of India offers a wide range of services in the Personal Banking
Segment which are indexed here.

Term Deposits
SBI provide security, trust and competitive rate of interest. Flexibility in period of term
deposit from 7 days to 10 years. It is affordable low minimum deposit amount with SBI
for a nominal amount of Rs.1, 000 only. Customers can avail a loan/overdraft against
their deposit. SBI provides loan/overdraft up to 90 per cent of their deposit amount at
nominal cost. Recurring Deposits
Recurring Deposit provides customers the element of compulsion to save at high rates
of interest applicable to Term Deposits along with liquidity to access that savings any
time. Recurring Deposit is flexibility in period of deposit with maturity ranging from 12
months to 120 months. It is low minimum monthly deposit amount. The customer can
start a Recurring Deposit with SBI for monthly instalment of Rs.100 only.
SBI Home Loan
It offers interest rates concessions on Green Homes in accordance with SBI‟s
commitment to Environment protection. The product gives the customers a onetime
irrevocable option to choose one of the three customized combinations of fixed and
floating interest rates and also to choose the order in which the fixed and floating rate
will be availed. The minimum loan amount sanctioned is Rs.5lakh. Its products are
again segregated into different types on the basis of their term of repayment and their
loan package: SBI-Maxgain Home Loans, Realty Home Loans, Home Equity Loans,
NRI Home Loans, Tribal Plus, Gram Niwas, SahyogNiwas, Green Home Loan,
Surakshit Home Loan, Yuva Home Loan, Home Loan Pal. Thus, the bank provides its
customers comfortable repayment obligations – Tenure of the loans equal to the
residual maturity of the original Home Loans.

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SBI Car Loan

The bank provides its customers the best car loan schemes with excellent service and
lower costs. A quick view by the customers of similar schemes available with other
banks shows that SBI Car Loans for new and old vehicles offer for the customers.

SBI Education Loan

A term loan granted to Indian Nationals for pursuing higher education in India or
abroad where admission has been secured. All courses having employment prospects
are eligible for getting education loans and they are briefed below.

SBI Loan to Pensioners

The customer can avail of a loan from their branch to meet their personal expenses.
They can avail a loan of up to a maximum of 12 months pension, subject to a ceiling of
Rs.1 lakh. The loan may be repaid over a 5 years and will carry a low interest rate of
13.25 per cent per annum.

SBI Loan against Shares/Debentures

The customers can avail of loans up to Rs.20 lakh against their shares/debentures to
enable them to meet contingencies, personal needs or even for subscribing to rights or
new issue of shares.

SBI Agricultural Loans

The Bank launched the new products, to increase the flow of credit to agriculture sector
in the year 2003-2004. The advances of Agriculture Business Group increased from
Rs.1,360crore in 2003-04 to Rs.34,933 crore in 2006-07 showing an increase of 2468.6
per cent. Agricultural loans are provided for the purchase of assets connected with rural
activities under agriculture, horticulture, plantation, sericulture, animal husbandry,
fisheries etc., where the loan amount is repayable over a period of time exceeding 3
years.

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Under this agricultural loan there are other kinds of benefits provided by SBI through
schemes such as the Kisan Credit Card Scheme, Land Development Schemes, Minor
Irrigation Schemes, Farm Mechanisation Schemes, Krishi Plus Scheme for Customised
Hiring of Tractor to Rural Youth, Lead Bank Scheme etc

SBI Industrial Loans

SBI offers working capital finance to meet the entire range of short-term fund
requirements that arise within a corporate day-to-day operational cycle. The SBI
working capital loans can help company in financing inventories, managing internal
cash flows, supporting supply chains, funding production and marketing operations,
providing cash support to business expansion and carrying current assets. The SBI
corporate term loans can support company in funding ongoing business expansion,
repaying high cost debt, technology up gradation, R&D expenditure, leveraging
specific cash streams that accrue into a company, implementing early retirement
schemes and supplementing working capital. Hence, the Bank extends financial
assistance to help agriculturists, industrialists and common man in various modes.

HUMAN RESOURCES
Learning & Development
The bank has taken up several key initiatives to enthuse and motivate the employees to
perform better so as to achieve the Bank‟s growth plans. As part of the initiative it has
taken up a „Leadership pipeline‟ initiative with the objective of grooming the officials
from the level of Scale-IV up to GM for future leadership positions. Services of reputed
institutions like ISB/Duke University/IIMs have been engaged for the purpose. Further,
the Bank has gone in for accreditation of one of the training institutions for training of
debt recovery agents to facilitate the future appointments of recovery agents. As the
Accreditation process is mandatory for the recovery agents.

Personnel Management
To foster team spirit amongst the employees and to motivate them to excel
in customer service the bank has set up the Performance Linked Incentive
Scheme which also helped the Bank in exploiting the new emerging

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business opportunities to achieve the Bank‟s growth plans. The Bank has
also gone for contract employment, on cost to company basis, of specialists
like Chartered Accountants, Law Officers, Statisticians, Economists,
Customer Relation Executives, Credit Analysts etc. to take care of Bank‟s
growing needs to face competition.

The Bank also revised the Family Pension Scheme for the family pensioners of
the Bank retrospectively from the 1st May 2005. The pension fund has been
separated from the Banks‟ liability after obtaining necessary approval from the
Board of Trustees. The fund will be managed by the Treasury Dept. of SBI for
better returns.

HRMS Project
The Bank has implemented leveraging Technology in employee management area for
automation of its HR process through SAP-ERP-HRMS software. A centralized
database of all employees across SBI is now available where salary processing for 2.05
lakh employees across SBI and pension processing of approximately 1 lakh SBI/IBI
pensioners has been centralized. The bank also introduced a variety of services like
online request submission and viewing of data etc. to all the employees of the Bank on
an online „real time‟ basis, which will increase efficiency in HR operations and help the
management in making employee related decisions faster.

Recruitment
To meet the requirement of skilled manpower and to tap the emerging business
opportunities the bank has recruited 66 Specialist Management Executives with
qualification of CA/ICWA/MBA (Finance, Marketing) during the year. Also the bank
has inducted 7 Special Technical Executives with B.E. /B.Tech qualification in the
fields of Chemical, Mechanical, Electrical, Metallurgical Engineering appointed for
manning consultancy cells in Circles. Further, 917 Probationary Officers and 118 other
Specialist Officers have been recruited during FY 2011-12. This will take care of the
Bank‟s requirements of officers in operations and specialized areas and helps in
reducing the age profile of staff but will also provide an opportunity for greater
mobility and marketing thrust across the Bank to achieve its growth plans. Besides

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these the bank has also been successfully holding online examination for promotion
from JMGS I to MMGS II, all promotion exercises in respect of officers up to the grade
of Deputy Managing Director.

Training
The bank is making continuous efforts to impart knowledge, to develop skills and also
to re-orient the attitude of its employees and to keep pace with the changing business
environment. The banks network of providing training to its employees consists of 4
apex level colleges viz. State Bank Staff College, Gurgaon; State Bank Staff College,
Hyderabad; State Bank Institute of Rural Development and State Bank Institute of
Information and Communication Management and over 50 training centres located
across the country. The bank also provides on-site training to its employees working in
the branches under the visiting faculty scheme.

Support Systems and Internal Communication System

Adequate support systems have been provided by the bank to its employees for proper
flow of information to them. The employees are also informed about the achievements
in the business. The media used for internal communication includes: The SBI Monthly
Review, Gurukula, SBI Economic Newsletter, and Choyanika

Industrial Relations
In view of garnering good and excellent relationships with the members of both the
Staff and Officers Federations the State Bank of India sorted out various industrial
relations issues through their consistent support and healthy dialogue/discussions
during the year. It also enhanced the limits under various staff loan schemes and other
initiatives for providing better facilities / incentives to the employees, in order to create
better industrial relations environment in the Bank.

Human Resources Management Solutions (HRMS)

The bank has set up a centralized platform for the processing and payment of salary of
all the employees of SBI, SBP, SBM & SBH. It further introduced the automation of
centralized Provident Fund related services to augment faster settlement of terminal
benefits.

25
Strategic Training Unit (STU)
The banks Strategic Training Unit (STU) has been fully operationalized on 5th April
2010. It has undertaken a number of initiatives during the year 2011-12 to increase the
efficiency and effectiveness of the Bank‟s training system. Some of the major
initiatives in this regard are as follows:
1. Over 2 lakh (96.7 per cent of Bank‟s staff strength) employees were trained at 5 ATIs
and 47 SBLCs.
2. State Bank Training Management System has been operationalized for creating a
comprehensive database and tracking of training of all employees.
3. E-learning through HRMS portal has been expanded to over 213 courses and about
83% of the staff are now registered on the portal.
4. Leadership Development Programmes were organized for Top Executives and Senior
Management.
5. Research studies by the Bank officials were recognized by various outside
publications/agencies like Bancon, ICRIER, IBFA.

2.4 E-BANKING

Electronic banking is one of the truly widespread avatars of E-commerce over the
world. Various authors define E-Banking differently but the most definition depicting
the meaning and features of E-Banking are as follows:
1. Banking is a combination of two, Electronic technology and Banking.
2. Electronic Banking is a process by which a customer performs banking Transactions
electronically without visiting their banks.
3. E-Banking denotes the provision of banking and related service through Extensive use of
information technology without direct recourse to the bank by the customer.

26
2.5 NEED FOR E-BANKING
One has to approach the branch in person, to withdraw cash or deposit a cheque or
request a statement of accounts. In true Internet banking, any inquiry or transaction is
processed online without any reference to the branch (anywhere banking) at any time.
Providing Internet banking is increasingly becoming a "need to have" than a "nice to
have" service. The net banking, thus, now is more of a norm rather than an exception in
many developed countries due to the fact that it is the cheapest way of providing
banking services. Banks have traditionally been in the forefront of harnessing
technology to improve their products, services and efficiency. They have, over a long
time, been using electronic and telecommunication networks for delivering a wide
range of value added products and services. The delivery channels include direct dial –
up connections, private networks, public networks etc. and the devices include
telephone, Personal Computers including the Automated Teller Machines, etc. With the
popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is
increasingly used by banks as a channel for receiving instructions and delivering their
products and services to their customers. This form of banking is generally referred to
as Internet Banking, although the range of products and services offered by different
banks vary widely both in their content and sophistication.

2.6 E-BANKING PRODUCTS

Automated Teller Machine (ATM)

These are cash dispensing machine, which are frequently seen at banks and other
locations such as shopping canters and building societies. Their main purpose is to
allow customer to draw cash at any time and to provide banking services where it
would not have been viable to open another branch e.g. on university campus. An
automated teller machine or automatic teller machine (ATM) is a computerized
telecommunications device that provides a financial institution's customers a method of
financial\ transactions in a public space without the need for a human clerk or bank

27
teller. On most modern ATMs, the customer identifies him or herself by inserting a
plastic ATM card with a magnetic stripe or a plastic smartcard with a chip that contains
his or her card number and some security information, such as an expiration date or
CVC (CVV). Security is provided by the customer entering a personal identification
number (PIN).Using an ATM, customers can access their bank accounts in order to
make cash withdrawals (or credit card cash advances) and check their account balances.
Many ATMs also allow people to deposit cash or checks, transfer money between their
bank accounts, pay bills, or purchase goods and services. Some of the advantages of
ATM to customers are:-
• Ability to draw cash after normal banking hours
• Quicker than normal cashier service
• Complete security as only the card holder knows the PIN
• Does not just operate as a medium of obtaining cash.
• Customer can sometimes use the services of other bank ATM’s.

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 customerhas to follow
particular process, initially account number and telephone PIN are fed forthe process to
start. Also the VRS system provides the users within additional facilities such as

28
changing existing password with the new desired, information about new products,
current interest rates etc.

Mobile Banking

Mobile banking comes in as a part of the banks initiative to offer multiple channel 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.

Internet Banking

The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have
used powerful computer networks to automate million of daily transactions; today, often the
Only paper record is the customer‟s receipt at the point of sale. Now that their customers are
connected to the Internet via personal computers, banks envision similar advantages by
adopting those same internal electronic processes to home use. Banks view online banking as
a powerful “value added” tool to attract and retain new customers while helping to eliminate
costly paper handling and teller interactions in an increasingly competitive banking
environment.

Types of internet 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.

29
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

Interaction between the bank‟s system and the customers. The interaction may be
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 within formational
systems.Appropriatecontrolsneedtobeinthe place to prevent, monitor, and alert manage
ment 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.

2.7 ADVANTAGES OF INTERNET BANKING

•Convenience

Unlike your corner bank, online banking sites never close, they‟re available 24 hours a day,
seven days a week, and they‟re only a mouse click away.

•Ubiquity

If you‟re out of state or even out of the country when a money problem arises, you can log
on instantly to your online bank and take care of business, 24\7.

30
 • Transaction speed

Online bank sites generally execute and confirm transactions at or quicker than ATM
processing speeds.

•Efficiency
You can access and manage all of your bank accounts, including IRA‟s, CDs, even
securities, from one secure site.

•Effectiveness
Many online banking sites now offer sophisticated tools, including account aggregation,
stock quotes, rate alert and portfolio managing program to help you manage all of your
assets more effectively. Most are also compatible with money managing programs such
as quicken and Microsoft money.

2.8 DISADVANTAGES OF INTERNET BANKING

•Start-up may take time

In order to register for your bank‟s online program, you will probably have to provide ID and
sign a form at a bank branch. If you and your spouse wish to view and manage their assets
together online, one of you may have to sign a durable power of attorney before the bank will
display all of your holdings together.

•Learning curves

Banking sites can be difficult to navigate at first. Plan to invest some time and\or read the
tutorials in order to become comfortable in your virtual lobby.
•Bank site changes
Even the largest banks periodically upgrade their online programs, adding new features in
unfamiliar places. In some cases, you may have to re-enter account information

31
2.9 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 s
ervice 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
Rs25per page,which includesonly 30transactions.Moreover,the bank branch would t
ake eight days to deliver it at your doorstep. If the fund transfer has to be made out
station, 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
CHAPTER III
REVIEW OF LITERATURE

3.1MEANING OF LITERATURE REVIEW

• Provides an overview and a critical evaluation of a body of literature relating to a
research topic or a research problem.
• Analyzes a body of literature in order to classify it by themes or categories, rather
than simply discussing individual works one after another.
• Presents the research and ideas of the field rather than each individual work or author
by itself.
A literature review often forms part of a larger research project, such as within a thesis (or
major research paper), or it may be an independent written work, such as a synthesis paper.

3.2 PURPOSE OF A LITERATURE REVIEW

A literature review situates your topic in relation to previous research and illuminates a spot
for your research. It accomplishes several goals:
• provides background for your topic using previous research.
• shows you are familiar with previous, relevant research.
• evaluates the depth and breadth of the research in regards to your topic.
• determines remaining questions or aspects of your topic in need of research

3.3 RELATIONSHIP BETWEEN A LITERATURE REVIEW AND A

RESEARCH PROJECT
Academic research at the graduate level is always part of a dialogue among researchers. As a
graduate student, you must therefore indicate that you know where your topic is positioned
within your field of study.
Therefore, a literature review is a key part of most research projects at the graduate level.
There is often a reciprocal relationship between a literature review and the research project
for which it is written:
• A research project is often undertaken in response to a literature review. Doing the
literature review for a topic often reveals areas requiring further research. In this way,
writing the literature review helps to formulate the research question.

33
• A literature review helps to establish the validity of a research project by revealing
gaps in the existing literature on a topic that offer opportunities for new research.
REVIEW OF LITERATURE

Abou-Robich, Moutaz (2005) studied how to analyse comfort levels and attitude of users
towards online banking facilities. The findings resulted that there is a correlation between
attitude towards e-banking and feeling of security with regard to their demographic variables.

Isern, Jennifer (2008) pointed out that a positive relationship between the level of financial
infrastructure and the level of competition and a negative relationship between the degree of
state ownership in a banking sector and the level of competition.

Reynolds, John (2007) said that 2006 e-banking technology services industry customer
loyalty survey data results in order to improve marketing resource allocation for corporate
ebanking products and services.

Huang, Haibo (2005) reveals that the successful introduction electronic money and
ebanking services depends mainly on people acceptance.The major finding is that although
ebanking customers more or less have some common characteristics, they differ across
different types of e-banking services.

Taft, Jeanette (2007) pointed out that Technology Acceptance Model (TAM) as applied to a
specific type of technology: e-banking.They suggested that e-banking – prior training,
perceived ease of use of e-banking technology.

Jeon, Kiyong (2014) have said that consumer prefer larger banks in U.S.Because they has to
reduce their transportation cost by way of larger banks have multiple ATM centre‟s across
the country.

Lee, Jihyun (2003) examined that to identify whether customer intention affecting to use
online financial services.The effects of attitude toward behaviour,subjective norm were
examined.Demographic variables were included as control variables.

Ding, Xin (2007) reveals that consider for research consumer behaviour on internet in the
last years.The findings conclude that customer behaviour from self-service, Service quality
and experience design perspectives.

34
Wamalwa, Tom (2006) said that whether internet banking strategies were aligned with the
bank‟s core business based or not identified.
Featherman, MauricioSanchez (2002) studied that perceived risk inhibited consumer
adoption intentions as well as perception of the usability, usefulness of online payment.

Bayles, MichelleEsther (2004) have said that investigating factor contribute their decision to
bank online, frequency of banking activities.

Massad, Nelson (2003) contributed at a theoretical level by providing deeper understanding

of the transactions between customers and service providers.

Yee Yen, Yuen (2011) have said that comparison between factors affecting consumer
acceptance of internet banking services between developed and developing countries.

Siregar, DonaD (2004) investigate that the relative importance of different factors influence
bank decision on going public over consolidating with other banking organisations.Many
banks experienced consolidation through merger acquisitions (M&A).

Bauer, Keldon.J (2002) examined that bankers and consumers are both interested in the
potential for internet banking. Thefindings show that banks too have been developing their
infrastructure to address what they perceive as a growing demand for online services.

Yousafzai, ShumailaYakub Khan (2005)has said that to develop aconceptual model that
determines how intentions towards the use of internet banking are formed and to what extent
they are related to the actual use of internet banking.

Ubadineke, Francis.N (2009) indicated that advances ininformation technology and

telecommunications are resulting in new delivery channels for bank products and services in
the developing countries.

Nor, KhalilMd (2005) results indicate that the model provides a good understanding of
factors that influence the intention to use internet banking.

Chen,Lisa(2012) studied that will increase our understanding

infinancial,accounting,management of information system,business administration and
decision making related to the adoption of Internet banking in Mainland China.

35
Adham, KhairulAkmaliah (2000) indicated that Malaysian banks could be grouped into
two in regard to their reasons for adopting the electronic delivery systems.

Shaza W. Ezzi (April 2014) In their research paper titled “A Theoretical Model for Internet
Banking: Beyond Perceived Usefulness and Ease of Use” tried to inquired different types of
electronic banking like ATM‟s, telephone banking, and electronic funds transfer, Internet
banking like has evolved from consumers‟ needs to have superior access to banking services
clear of most banks teller-staffed, normal operating hours. Additionally, Internet banking has
grown swiftly from the recent and the span increases in ecommerce. Internet banking (IB)
continues to govern the landscape of electronic banking as consumers continue to use IB to
complete schedule banking transactions in addition to conducting on-line sales and
purchasing. This study presents a theoretical model considered to help researchers and
practitioners better understand the acceptance and adoption of Internet Banking. The
proposed model maybe particularly useful in developing nations where consumers are loath
to use Internet Banking even when the services are available. However, a review of several
studies that have investigated consumers‟ acceptance of Internet banking services from a
multiplicity of perspectives have not reached a clear consensus of the factors that contribute
to overall consumer acceptance and adoption. The paper concludes with discussions of the
managerial implications and avenues for future research

Ms. Fozia (2013) The purpose of this paper is to determine the customer‟s perception toward
the ebanking services. A total of number of customer taken for the study is 196. Analysis of
variance technique is employed to study the significant relationship between the occupation
and customer perception of e-banking services and significant relationship between the age
and customer perception of e-banking services. The result of the study clearly shows that
different age group of customer and different occupation group of customers have different
perception toward the e-banking services. The results also propose that demographic factors
impact significantly internet banking behavior, specifically, occupation and age. Finally, this
paper suggests that an understanding about the customer‟s perception regarding the e-
banking services of public and private banks it will help to the banker to understand the
customers need in better way.

Jayshree Chavan (2013) In his research paper “Internet Banking- Benefits and challenges in
an Emerging Economy”. This study presents New Information technology has taken

36
imperative place in the future expansion of financial services, especially banking sector
conversion are affected more than any other financial provider groups. Increased use of
mobile services and use of internet as a new division channel for banking transactions and
international trading requires more concentration towards e-banking security against
deceptive activities. The development and the increasing progress that is being experienced
in the Information and Communication Technology have brought about a lot of changes in
almost all facets of life. In the Banking Industry, it has been in the form of online banking,
which is now replacing the traditional banking practice. Online banking has a lot of benefits
which add value to customers‟ satisfaction in terms of better quality of service offerings and
at the same time enable the banks gain more competitive gain over other competitors. This
paper discusses some challenges in an emerging economy.

Rakesh H M & Ramya T J (2014) In their research paper titled “A Study on Factors
Influencing Consumer Adoption of Internet Banking in India” tried to examine the factors
that influence internet banking adoption. Using PLS, a model is successfully proved and it is
found that internet banking is influenced by its perceived reliability, Perceived ease of use
and Perceived usefulness. In the marketing process of internet banking services marketing
expert should emphasize these benefits its adoption provides and awareness can also be
improved to attract consumers‟ attention to internet banking services.

Amruth Raj Nippatlapalli (2013) In his research paper “A Study on Customer Satisfaction
of Commercial Banks: Case Study on State Bank of India”. This paper present Customer
satisfaction, a term frequently used in marketing, is a measure of how products and services
supplied by a company meet or surpass customer expectation. Customer satisfaction is
defined as "the number of customers, or percentage of total customers, whose reported
experience with a firm, its products, or its services (ratings) exceeds specified satisfaction
goals."Banking in India originated in the last decades of the 18th century. The first banks
were The General Bank of India, NOW which started in 1786, and Bank of Hindustan, which
started in 1790; both are now defunct. The oldest bank in existence in 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

37
quasi-central banks, as did their successors. The three banks merged in 1921 to form the
Imperial Bank of India.

Mr. Vijay Prakash Gupta & Dr. P. K. Agarwal (2013) In their research paper
“Comparative Study of Customer Satisfaction in Public Sector and Private Sector Banks in
India”. This paper gives with the introduction of liberalization policy and RBI's easy norms
several private and foreign banks have entered in Indian banking sector which has given birth
to cut throat competition amongst banks for acquiring large customer base and market share.
Banks have to deal with many customers and render various types of services to its
customers and if the customers are not satisfied with the services provided by the banks then
they will defect which will impact economy as a whole since banking system plays an
important role in the economy of a country, also it is very costly and difficult to recover a
dissatisfied customer. Since the competition has grown manifold in the recent times it has
become a herculean task for organizations to build loyalty, the reason being that the customer
of today is spoilt for choice. It has become imperative for both public and private sector
banks to perform to the best of their abilities to retain their customers by catering to their
explicit as well as implicit needs. Many a times it happens that the banks fail to satisfy their
customer which can cause huge losses for banks and there the need of this study arises. The
purpose of this research article is to examine the customer satisfaction among group of
customer towards the public sector& private sector banking industries in India. Study is
cross-sectional and descriptive in nature. The researcher tries to makes an effort to clarify the
Customer Service satisfaction in Indian banking Sector. Descriptive research design is used
for this study, where the data is collected through the questionnaire. The information is
gathered from the different customers of the two banks, viz., PNB and HDFC Bank located
in the Meerut Region, Uttar Pradesh. Hundred bank respondents from each bank were
contacted personally in order to seek fair and frank responses on quality of service in banks.
The service quality model developed by Zeithamal, Parsuraman and Berry (1988) has been
used in the present study. The analysis clearly shows that there exists wide perceptual
difference among Indian (public sector) banks regarding overall service quality with their
respective customers, when compared to Private sector banks. Whereas the said perceptual
difference in private banks is narrow.

38
CHAPTER IV
PROBLEM IDENTIFICATION
4.1 STATEMENT OF THE PROBLEM:
State Bank of India offers their customers the facility of Internet Banking service. With state
Banks .Internet Banking service we can carry out banking activities from the comfort of our
home /office with only our mouse. Using our Internet Banking ID and password, we can
view our state Bank accounts /do transactions online 24x7 without any hassle. We can
transfer funds online to accounts maintained with any bank in India. We can also access all
our state Bank accounts from all around the world 24x7.

“The Internet banking facility offered by State Bank of India is not widely accessed by
the State bank customers”

Customer does not access Internet banking of various reasons, such as:

• The information can be leaked or account can be hacked and all confidential
information can be leaked.
• Bank charges hidden Costs.
• Lack of Operational knowledge.
• No Access to Internet/Mobile.
• Concerned about security.

4.2 OBJECTIVES OF THE STUDY

• To study about the factors that affects the customer perception towards E-banking service
of State Bank of India.

• To know about the current and future prospects of E-Banking to the customers.

• To find out the major problems faced by the customers while using e-banking services.

39
OBJECTIVES OF THE RESEARCH

• To evaluate the awareness of E-Banking among the customers of SBI.

• To measure the customer satisfaction in E-Banking services provided by SBI.

• To study the most preferred E-Banking service offered by SBI

• To know which age group of customers is using different e-banking facilities.

• To know the cause why customers are not using internet banking

4.3 NEED OF THE STUDY

• To determining growth direction of online banking service.
• Promoting E-banking services in banking industry.
• Customer perception will be taken into consideration about the internet banking.

4.4 SCOPE OF THE STUDY

• All the classes of the customers were taken into consideration.
• This study was covered E-Banking service sector.
• This is a realistic source directly collected from the customers of Bank.
• The emergence of E-Banking has enabled the banks to offer real-time transactions and
integrate all customers‟ related functions. Indian Banks are utilizing the new technology to
provide better technology and convenient access to its customers and India is thus poised to
for a huge growth in the world of electronic banking.

4.5 LIMITATION OF THE STUDY

• Some respondents were hesitating to give true responses.

• The data was collected within 1 month time period.

• The inferences apply only to the respondents of Madurai City and are not applicable to any
other place and cannot be generalized.

40
4.6 TYPE OF RESEARCH
This study is EXPLORATORY and DESCRIPTIVE in nature. It helps in breaking vague
problem into smaller and precise problem and emphasizes on discovering of new ideas and
insights. Exploratory research was conducted during the initial stage of the research process
which helped to refine the problem into researchable one. It has progressively narrowed the
scope of research topic.

Research design:

Research design constitutes the blue print for the collection, measurement and analysis of
data. The present study seeks to identify the extent of preferences of E-Banking over
traditional banking among service class. The research design is exploratory in nature. The
research has been conducted with the customers of SBI, Madurai. For the selection of the
sample, convenient sampling method was adopted and an attempt has been made to include
all the age groups and gender within the service class.
Sources of data:
Following are the methods of sources of data:
Secondary data:
•Article son E-Banking taken from journals, magazines.
•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, dichotomous and offering multiple choices.
Sampling unit:

It defines the target population that will be sampled i.e. it answers who is to be surveyed. In
this study, the sampling unit is the Customers of SBI, Madurai.

41
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, the sample size was restricted to
150respondents. The respondents belong to different income group and profession.
Method of data collection:
The survey method is used to collect the data from State Bank of India, Town Branch,
Madurai, visited for the purpose of collection of data.
Research instrument:
The instrument used for gathering data was questionnaire. To get further insight in to the
research problem, interview regarding their buying practices too was made. This was done to
crosscheck the authenticity of the data provided. To supplement the primary data and to
facilitate the process of drawing inference, secondary data was collected from published
sources like magazines, journals, newspapers etc.
Tools and techniques of analysis:
The data so collected will be analysed through the application of statistical techniques, such
as bar graphs and pie charts.

42
CHAPTER V
PROBLEM FORMULATION
5. PROBLEM FORMULATION
The second step in problem resolution strategy is problem formulation. Problem formulation
is very specific. The major sets of variables that compose or constitute the problem are
identified. Any problem is composed of two major sets of variables: controllable and
uncontrollable. Hence some of the variables which affect the Internet Banking services are
show below.
Controllable Variables Controllable Variables
Service Quality Competitor Strategies
Advertisement Literacy rate
User Friendly Industry Norms
Technology Up gradation Government Regulations
Security Issues Customer preference.
Server Error
Skilled Manpower

Server Error Skilled Manpower

5.1 CONTROLLABLE VARIABLES

Controllable Variables are aspects of a phenomenon or situation that can be directly
influenced or controlled.
Service Quality:

Customer satisfaction is a challenging task in today‟s competitive world of businesses.

Among these e-businesses is banking sector business. These businesses are tremendously
trying to deploy customer relationship management and improve the connections between
the business and customer for their satisfaction. Online banking offer s facilities and services
to the customers whereas the role of IT is very dominant factor for improving the quality of
services to achieve customer satisfaction.

43
Advertisement:

State Bank of India promotes the user-friendly features of their online services. They also
have plenty of incentive and opportunity to assure consumers that their mobile services are
safe and convenient. Union Bank of India promotes their E-Banking services to their
customer by sending SMS related to their E-Banking services to create awareness among the
customer.

User Friendly:

The information in the State Banks website is easy to read and unambiguous. Bullet points
are used to list the information. The bank also has a demo version of software, which
describes how conveniently a customer can access various services.

Security Issues:

State Bank of India has gone to extraordinary lengths to ensure that your online transactions
are secure, by placing its devises in most secured environment as evidenced by the digital
certificate issued by "VERISIGN", which helps the customer and bank for bankingsafely.

Skilled Manpower:

Manpower is the key factor for the success of any organization. Union Bank has qualified
and skilled employees who will and always will be delighted to extend their services to the
customers with heartfelt efforts.

Technology Up gradation:

Technology up gradation aims at modernization of Union Bank of India. State Bank has
assigned priority to the up gradation of technological infrastructure in the financial system.
Substantial progress has been made for developing a modern, efficient, integrated and secure
payment and settlement system for the financial services sectors.

The Reserve Bank has been playing a pivotal role in the up gradation of technology in the
banking sector with the objective of putting in place a safe, secure, robust, efficient andint

44
egrated payment and settlement system that will function on-line in a real-time environment.
The National Payment Council (NPC) with representation from the industry is an important
part of this process. The Reserve Bank has also been making sustained efforts to implement
an integrated and efficient payment system.

Server Error:

Server error on the Internet, and those annoying error messages, occur quite frequently and it
is quite frustrating , Many times we may receive an OL or OLSU error (or no error code at
all) when we set up an account for online services or attempt to download transactions. This
may be caused by:

A problem at the bank (sometimes referred to as our financial institution or FI), The servers
may be down, They may have made changes regarding whether they allow either Web
Connect or Direct Connect, A problem with our internet connection. Problem with one or
more accounts the company file.

5.2 UNCONTROLLABLE VARIABLE:

Uncontrollable Variables are aspects of business to which the retailer must adapt (such as
competition, the economy, and laws).

Competitor strategy:

Any successful approach to achieving top-line growth must take into account what your
competitors are, and are not, doing, and balance those insights with a detailed understanding
of where promising market opportunities are to be found. Ignoring either of these activities
puts top-line growth at risk. SBI is working on new business strategy to focus on various
segments of customers which could help in rationalizing its operating structure and grow
aggressively at the same time. Currently, the bank is redefining the business model of its
branches which relieved employees from their routine transaction processing tasks thereby
enabling them to devote more time in acquiring and managing customer relationships.

45
Literacy Rate:

Lack of operational knowledge will affect E-Banking services, so that customer will face
problem while accessing E-banking services. While creating awareness and promotion
strategies, customer will face problem to understand upon their literacy level.

Government regulations:

Bank must adopt effective and reliable security controls for

electronic banking, that integrate into the bank's overall security program, including system-
wide accesscontrols, user authentication, encryption, transaction verification, and virus
protection controls. Implement policies and controls according to the sensitivity and
importance of data. Growth of the company is highly affected by the various regulations and
policies of the Government.

Customer Preference:

State Bank provides good service quality to satisfy the varying needs of today's customers,
but service quality is not alone sufficient, trust among the customers is another important
factor which is a predictor of consumer preference. Customers are changing their behaviour
and demanding lower fees for higher levels of service or other improvements. If these
demands are not met, they are increasingly likely to shop around at other banks for
competitive rates for services and products.

5.3 E- BANKING SERVICES:

1. Bill payment service

Each bank has tie-ups with various utility companies, service providers and insurance
companies, across the country. It facilitates the payment of electricity and telephone bills,
mobile phone, credit card and insurance premium bills. To pay bills, a simple one-time
registration for each biller is to be completed. Standing instructions can be set, online to pay
recurring bills, automatically. Most interestingly, the bank does not charge customers for
online bill payment.

46
2. Fund transfer

Any amount can be transferred from one account to another of the same or any another bank.
Customers can send money anywhere in India. Payee‟s account number, his bank and the
branch is needed to be mentioned after logging in the account. The transfer will take place in
a day or so, whereas in a traditional method, it takes about three working days. ICICI Bank
says that online bill payment service and fund transfer facility have been their most popular
online services.

3. Credit card customers

Credit card users have a lot in store. With Internet banking, customers can not only pay their
credit card bills online but also get a loan on their cards. Not just this, they can also apply for
an additional card, request a credit line increase and God forbid if you lose your credit card,
you can report lost card online.

4. Investing through Internet banking

Opening a fixed deposit account cannot get easier than this. An FD can be opened online
through funds transfer. Online banking can also be a great friend for lazy investors. Now
investors with interlinked demat account and bank account can easily trade in the stock
market and the amount will be automatically debited from their respective bank accounts and
the shares will be credited in their demat account. Moreover, some banks even give the
facility to purchase mutual funds directly from the online banking system. So it removes the
worry about filling those big forms for mutual funds, they will now be just a few clicks
away. Nowadays, most leading banks offer both online banking and demat account. However
if the customer have there demat account with independent share brokers, then need to sign a
special form, which will link your two accounts

6. Recharging your prepaid phone

Now there is no need to rush to the vendor to recharge the prepaid phone, every time the talk
time runs out. Just top-up the prepaid mobile cards by logging in to Internet banking. By just
selecting the operator's name, entering the mobile number and the amount for recharge, the
phone is again back in action within few minutes.

47
7. Shopping at your fingertips

Leading banks have tie ups with various shopping websites. With a range of all kind of
products, one can shop online and the payment is also made conveniently through the
account. One can also buy railway and air tickets through Internet banking.

48
CHAPTER VI

PROBLEM SPECIFICATION

6. PROBLEM SPECIFICATION

The next stage in problem resolution strategy is problem specification. Problem

Specification is to explore, examine and understand the relationships (actual and potential)
between your controllable variables, between your uncontrollable variables,and bet ween
your controllable and uncontrollable variables. One of the fundamental laws in systems
thinking is that everything is connected with everything else in a global web or network of
relationships. Hence, all the variables, controllable and uncontrollable, are connected,
related, and they influence each other. So in this stage, we identify the major connections and
influences between variables.

Service Quality and Competitors.

Provide Better service than the Competitors, to overcome intense competition the bank has to
concentrate more on service quality.

Server error technology and service quality

By avoiding the server error bank can provide efficient customer services by improving the
quality of the services conveniently.

Security Issues and Risk associated with technology.

By providing efficient online banking safety protections bank can avoid risk associated with
technology, thus it will help the customers to bank online safely.

Advertisement and Literacy rate.

Better awareness and promotion needs to be created to make the Customer aware of the
services, which will make them to access e-Banking services conveniently.

Technology Up gradation and Government Regulations.

Various Government regulations restricts the organization to upgrade the technologies, thus
this will affect the growth of the organisation.

49
Government Regulations and Industry Norms.

Growth of the company is highly affected by the various regulations and policies of the
Government, and the Industry norms.

50
CHAPTER VII
PROBLEM
RESOLUTION
7. PROBLEM RESOLUTION:
• Familiarizing the customer to new environment by demo version of software on
bank‟s website.
• More customer care service will help to clear the customer queries.
• Strengthen the Promotional strategy, to make aware of the Internet Banking services
to each customer.
• Reduce the service charges.
• Make the website more convenient and user friendly.
• Every time you finish using your online banking session then sign out from the site
rather than just closing the browser.
• Never share your passwords or login details with anybody.
• View your account daily and check it with your transactions, if there is anything
which does not tally with your instructions then inform your bank immediately.

7.1. BEST ALTERNATIVE STRATEGY

Based on my study on E-Banking at Union Bank of India, the best strategy that the bank can
employ to increase the customer awareness on E-Banking might be through familiarizing the
customer to new environment by demo version of software on bank's website, which should
contain procedures and features of E-Banking. It will enable users to give suggestions for
improvements, which can be incorporated in later versions wherever feasible. This will also
help the bank to strengthen the Promotional strategy, to make aware of the Internet Banking
services to each customer.

51
CHAPTER VIII

DATA ANALYSISANDINTERPRETATION

8. DATA ANALYSISANDINTERPRETATION

TABLE AND CHART SHOWING THE GENDER DETAILS:

PARTICULARS NO OF RESPONDENTS PERCENTAGE
Male 97 64.66
Female 53 35.33
Total 150 100

TABLE 8.1

NO OF RESPONDENTS
120

100

80

60
NO OF RESPONDENTS
40

20

0
Male female

Interpretation:
The result shows that majority of respondents i.e. 64.66% are males and the remaining 35%
are females

52
TABLE AND CHART SHOWING AGE DETAILS

AGE NO OF RESPONDENTS PERCENTAGE

below 20 years 20 13.33
20-30 years 27 18
31-40 years 42 28
41-50 years 31 20.66
Above 50 years 23 15.33
Total 150 100

TABLE 8.2

NO OF RESPONDENTS
45
40
35
30
25
20
NO OF RESPONDENTS
15
10
5
0
below 20 20-30 31-40 41-50 Above 50
years years years years years

Interpretation:

From the above data we can analyze that majority of the respondents are aged between
3140years

53
TABLE AND CHART SHOWING EDUCATIONAL
QUALIFICATION OF THE RESPONDENTS:
PARTICULARS NO OF RESPONDENTS PERCENTAGE
SSLC 39 26
PUC 0 0
UG 95 63.33
PG 16 10.66
OTHERS 0 0
Total 150 100

TABLE 8.3

NO OF RESPONDENTS
100
90
80
70
60
50
NO OF RESPONDENTS
40
30
20
10
0
SSLC PUC UG PG OTHERS

Interpretation:
The result shows that majority of respondents i.e.63% fall under UG , only11% of the
respondents are post graduates.

54
TABLE AND CHART SHOWING OCCUPATIONAL DETAILS OF THE
RESPONDENTS

PARTICULARS NO OF RESPONDENTS PERCENTAGE

Student 20 13.33
Job holder 79 52.66
Business 17 11
Pensioner 15 10
House maker 19 12.66
Others 0 0

TABLE 8.4

NO OF RESPONDENTS
90
80
70
60
50
40
30
NO OF RESPONDENTS
20
10
0

Interpretation:
The result shows that majority of respondents i.e.52.66% are job holders.

55
TABLE AND CHART SHOWING INCOME LEVEL (MONTHLY) OF
THE RESPONDENTS

PARTICULARS NO OF RESPONDENTS PERCENTAGE (%)

Below Rs.10,000 39 26
Rs.10,000-Rs.20,000 60 40
Rs.20,000-30,000 32 21.33
Above Rs.30,000 19 12.66
Total 150 100

TABLE 8.5

Interpretation:
The result shows that majority of respondents i.e.40% are Rs.10-20 thousand income.

56
TABLE AND CHART SHOWING RESPONDENTS TYPE OF
ACCOUNT IN SBI:

PARTICULARS NO.OF RESPONDENTS PERCENTAGE (%)

Saving A/C 125 83.33
Current A/c 20 13
NRI A/c 3 2
Demat A/c 2 1
Total 150 100

TABLE 8.6

NO.OF RESPONDENTS
140

120

100

80

60 NO.OF RESPONDENTS

40

20

0
Saving A/C Current A/c NRI A/c Demat A/c

Interpretation:
From the above analysis we can analyze that majority of the respondents are having Savings
A/c in SBI and only few number of respondents are holding NRI A/c and Demat A/c.

57
TABLE AND CHART SHOWING HOW LONG RESPONDENTS ARE
ASSOCIATED WITH SBI:

PARTICULARS NO.OF RESPONDENTS PERCENTAGE (%)

Less than a year 85 43.77
1-5 year 65 56.66
Total 150 100

TABLE 8.7

NO.OF RESPONDENTS
90
80
70
60
50
40 NO.OF RESPONDENTS
30
20
10
0
Less than a year 1-5 year

Interpretation:
The result shows that majority of respondents i.e. 56.67% of the respondents are associated
with State bank from 1-5 years.

58
TABLE AND CHART DESCRIBING WHETHER THE RESPONDENTS
ARE AWARE OF E-BANKING SERVICES.

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

YES 143 95
NO 7 5
total 95 100

TABLE 8.8

NO OF RESPONDENDS
160
140
120
100
80
NO OF RESPONDENDS
60
40
20
0
YES NO

Interpretation:
The above results say that majority of the respondents are aware of the E-Banking service
offered by SBI.

59
TABLE AND CHART SHOWING TYPE OF E-BANKING SERVICES
RESPONDENTS ARE AWARE OF:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

ATM 105 70
Internet banking 26 17
Mobile banking 12 8
Credit card 7 4.66
Total 150 100

TABLE 8.9

NO OF RESPONDENDS
120

100

80

60
NO OF RESPONDENDS
40

20

0
ATM Internet Mobile Credit card
banking banking

Interpretation:
The result shows that majority of respondents i.e. 70% of the respondents accesses ATM
Services, while remaining 30% of the respondents uses other e-banking services.

60
TABLE AND CHART DESCRIBING WHETHER THE RESPONDENTS
ARE AVAILING E-BANKING SERVICES.

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

YES 130 86.66
NO 20 13.33
Total 150 100

TABLE 8.10

NO OF RESPONDENDS
140

120

100

80

60 NO OF RESPONDENDS

40

20

0
YES NO

Interpretation:
The above results say that majority of the respondents are availing the E-Banking service
offered by SBI.

61
TABLE AND CHART DESCRIBING HOW CONVENIENT IS
ACCESSING E BANKING SERVICES:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Easy 40 26.66
Normal 95 63.33
Difficult 15 10
total 150 100

TABLE 8.11

NO OF RESPONDENDS
100
90
80
70
60
50
NO OF RESPONDENDS
40
30
20
10
0
Easy Normal Difficult

Interpretation:
The above results say that majority of the respondents find normal while accessing E-
Banking services.

62
TABLE AND CHART DESCRIBING HOW FREQUENTLY
RESPONDENTS USE E-BANKING SERVICES:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Once in a day 25 16.66
Once in a week 100 66.6
Once in a night 10 6.6
Once in a month 12 8
Infrequently 3 2
Total 150 100

TABLE8.12

NO OF RESPONDENDS
120
100
80
60
40
NO OF RESPONDENDS
20
0

Interpretation:
The above result shows that majority of the respondents access E- Banking services once in a
week.

63
TABLE AND CHART DESCRIBING WHICH FACTORS INFLUENCE
MOST TO USE E-BANKING:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

All time availability 85 56.6
Ease of use 49 33
security 5 3
Direct access 10 7
Status symbol 1 0.66
Total 150 100

TABLE8.13

NO OF RESPONDENDS
90
80
70
60
50
40
30
20 NO OF RESPONDENDS
10
0

Interpretation:
From the above data we can observe that half of the respondents, ie.56.6% of the
respondents uses E-banking Services because of the all time availability of the E-Banking
services, 33% of the respondents use uses E-banking services because of ease of use and
remaining 7% and 3%of the respondents use E-banking services for security and direct
access.

64
TABLE AND CHART DESCRIBING BENIFTS WHILE USING E-
BANKING SERVICES:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Time saving 105 70
Inexpensive 10 7
Easy processing 15 10
Easy fund transfer 20 13.33
Total 150 100

TABLE 8.14

NO OF RESPONDENDS
120

100

80

60
NO OF RESPONDENDS
40

20

0
Time saving Inexpensive Easy Easy fund
processing transfer

Interpretation:
From the above data we can observe that majority of the respondents, ie .100%of the
respondents benefits time saving while accessing E-banking services while the others
benefits inexpensive and easy processing in accessing and easy fund transfer.

65
TABLE AND CHART DESCRIBING HOW CONVENIENT DOES
RESPONDENT FEEL WHILE USING ATM:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Easy 75 50
Normal 75 50
Total 150 100

TABLE 8.15

NO OF RESPONDENDS
80

70

60

50

40
NO OF RESPONDENDS
30

20

10

0
Easy Normal

Interpretation:
From the above data we can analyze that, respondents does not feel any difficulty while
using ATM.

66
TABLE AND CHART DESCRIBING HOW GOOD IS STATE BANK
ATM:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Much better than other 20 13.33
banks
Good 110 73.33
Excellent 20 13.33
Total 150 100

TABLE8.16
8

NO OF RESPONDENDS
120

100

80

60

40 NO OF RESPONDENDS

20

0
Much better Good Excellent
than other
banks

Interpretation:
From the above date we can interpret that the ATM facility offered by SBI is Good according
to the customers perspective.

67
TABLE AND CHART DESCRIBING AWARENESS OF MOBILE
BANKING SERVICES:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

YES 140 93.33
NO 10 7
Total 150 100

TABLE 8.17

NO OF RESPONDENDS
160
140
120
100
80
NO OF RESPONDENDS
60
40
20
0
YES NO

Interpretation:
From the above result we can obtain that majority of the respondents are aware of the Mobile
Banking services offered by SBI

68
TABLE AND CHART DESCRIBING TYPE OF SERVICE LIKED BY
RESPONDENTS IN MOBILE-BANKING:

Interpretation:
The above result shows that majority of the respondents use Mobile banking services for
Account Balance enquiry and Credit/ Debit Alerts.

69
TABLE AND CHART DESCRIBING PROBLEM RESOLVING LEVEL
IN A BANK REGARD E BANKING SERVICES:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Head office level 5 3.3
Regional level 3 2
Branch level 142 94.66
total 150 100

TABLE8.19

NO OF RESPONDENDS
160
140
120
100
80
NO OF RESPONDENDS
60
40
20
0
Head office level Regional level Branch level

Interpretation:
The above result shows that majority of the respondents problems are solved by branch level.

70
TABLE AND CHART DESCRIBING SATISFACTORY LEVEL OF
COMPLAINTS REGARDING E-BANKING SERVICES:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Highly satisfactory 50 33.33
Satisfactory 95 63.33
Neutral 5 3.33
total 150 100

TABLE 8.20

NO OF RESPONDENDS
100
90
80
70
60
50
40 NO OF RESPONDENDS
30
20
10
0
Highly Satisfactory Neutral
satisfactory

Interpretation:
The above results shows that the respondents are satisfied with the complaints regarding E-
banking Services.

71
TABLE AND CHART DESCRIBING HOW SATISFIED ARE THE
RESPONDENTS WITH E-BANKING SERVICES

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Highly satisfactory 65 34.33
Satisfactory 80 53.33
Neutral 5 3.33
Total 150 100

TABLE 8. 21

NO OF RESPONDENDS
90
80
70
60
50
40
NO OF RESPONDENDS
30
20
10
0
Highly Satisfactory Neutral
satisfactory

Interpretation:
The above results shows that, majority of the respondents are satisfied with the E-banking
Services offered by SBI.

72
TABLE AND CHART DESCRIBING HOW CONVENIENT YOU FIND
ACCESSING MOBILE BANKING AND INTERNET BANKING:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Easy 60 40
Normal 90 60
Total 150 100

TABLE 8.22

NO OF RESPONDENDS
100
90
80
70
60
50
NO OF RESPONDENDS
40
30
20
10
0
Easy Normal

Interpretation:
The above results shows that, majority of the respondents are normal convenient for
accessing mobile banking and internet banking

73
TABLE AND CHART DESCRIBING HOW SECURE USE MOBILE
BANKING AND INTERNET BANKING:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Good 110 73.33
Very good 40 26.66
Total 150 100

TABLE 8.23

NO OF RESPONDENDS
120

100

80

60
NO OF RESPONDENDS
40

20

0
Good Very good

Interpretation:
The above results shows that, majority of the respondents are secure to use mobile banking
and internet banking.

74
TABLE AND CHART DESCRIBING WHETHER FREQUENTLY
CHANGE PIN NUMBER:

PARTICULARS NO OF RESPONDENDS PERCENTAGE (%)

Yes 34 22.66
No 116 74.33
Total 150 100

TABLE 8.24

NO OF RESPONDENDS
140

120

100

80

60 NO OF RESPONDENDS

40

20

0
Yes no

Interpretation:
The above results shows that, majority of the respondents are NO to change pin number. So
suggest the customers must to change pin number at least in a

75
CHAPTER IX
FINDINGS ,SUGGESTIONS &LIMITATIONS
9.1. FINDINGS OF THE STUDY
From this study we can observe that majority of the respondents, ie, 42.5% of the respondents
benefits time saving while accessing E-banking services

• E-banking constitutes services provided in terms of ATMs, Debit Card, Credit Card,
Phone Banking, Mobile Banking, Internet Banking etc, of which the first six have
been covered. Amongst these ATM scores the largest used service status (75%), while
mobile banking lags behind by scoring the least ie.,7.5%, and Internet Banking
with17.5%.

• To find out the level of usage amongst the service class, percentage has been
calculated from the total completely filled in questionnaires and the incomplete
questionnaires were discarded. The frequency of usage of ATM is highest followed
by debit card.

• A study of the factors, influencing the usage was made by listing out various factors
such as all time availability, ease of use, nearness etc., and amongst the various
factors all time availability is ranked as the major motivating factor, followed by ease
of use, direct access, nearness in decreasing order of importance.

• When asked to list various benefits accruing from the usage of e-banking, timesaving
received highest percentage score at 70% among different benefits such as ,
inexpensive(10%),easy processing (10%), easy processing feature scored more than
th inexpensiveness of the e banking services. The other benefit securing to the people
in clude ready availability of funds,removal of middle men and no rude customer
relation executives.

• Among the users, various problems that are encountered while using e-banking
services. Card misuse and its misplace are major reasons that create hurdles in its
usage, while time consumption, accounting mistakes such as amount debited but not
withdrawn and change of mobile number seem to be the least bothering problems.

76
• From the non users, an attempt was made to elicit the reasons for its non usage.
Satisfaction with traditional banking was considered as prime de-motivating factor,
followed closely by the fear of insecurity, then „hidden cost‟ factor, which suggested
their resistance to change, which to some extent can be countered by aggressive
advertisement and utilizing other modes of awareness dissemination as well.

77
9.2 SUGGESTIONS

• Aligning roles and value propositions with the customer segments.

• Acquiring new capabilities through strategic alliances. The above can be implemented
in four steps.

• Familiarizing the customer to new environment by demo version of software on

bank's web site. This should contain tour through the features which are to be
included. It will enable users to give suggestions for improvements, which can be
incorporated in later versions wherever feasible.

• To provide services such as account information and balances, statement of account,

transaction tracking, mailbox, check book issue, stop payment, financial and
customized information.

• To include additional services such as fund transfers, standing instructions, opening

fixed deposits, intimation of loss of ATM cards.

• We can see the time is changing and we the passage of time people are accepting
technology there is still a lot of perceptual blocking which hampers the growth it‟s the
normal tendency of a human not to have changes work on the old track, that‟s also
one of the reason for the slow acceptance of internet banking accounts.

• The customers must to change a pin number at least in a month.

• Give proper training to customers for using E-banking

• Create a trust in mind of customers towards security of their accounts

• Provide a platform from where the customers can access different accounts at single
time without extra charge.

• Make the sites more users friendly.

• Customers should be motivated to use E- banking facilities more

78
9.3 LIMITATIONS OF THE STUDY
Every research is conducted under some constraints and this research is not an exception.
Limitations of this study are as follows:-
1. There were several time constraints.
2. The study is limited to areas of Mangalore only.
3. The sample size of only 40 was taken from the large population for the purpose of study,
so there can be difference between results of sample from total population.
4. The study is related customers only.
5. People were reluctant to go in to details because of their busy schedules
6. Merely asking questions and recording answers may not always elicit the actual
information sought.
7. Due to continuous change in environment, what is relevant today may be irrelevant
tomorrow.

79
CONCLUSION

The usage of E-banking is all set to increase among the service class. The service class at the
moment is not using the services thoroughly due to various hurdling factors like in security
and fear of hidden costs etc. So banks should come forward with measures to reduce the
apprehensions of their customers through awareness campaigns and more meaningful
advertisements to make E-banking popular among all the age and income groups. Further,
with increasing consumer demands, banks have to constantly think of innovative customized
services to remain competitive. 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 marketplace of today. 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.

80
BIBLIOGRAPHY

Hand note on Problem-Centered Summer Internship Projects (SIP) and Business Consultancy
Projects(BCP): New Research Paradigms, Oswald A. J. Mascarenhas, S. J., Ph.D

Jordon, Natarajan, “Banking Theory, Law and Practice”, Himalaya Publications, 19th
Edition, pp501-516

Jayaragavan Itengar,“Introduction to Banking”, Excel Books, First Edition, New Delhi,

pp220-233

WEBSITES:

1.http://www.unionbankofindia.co.in/ Last accessed on 12/09/2012

2.http://money.rediff.com/companies/union-bank-of-india/14030018/ratio
3.http://capitaline.com/user/framepage.asp?id=1
4.http://web.ebscohost.com/ehost/detail?vid=4&hid=113&sid=473dc91e-3241-4a30-
bcc0be8af351535e%40sessionmgr114&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d
5.http://w eb.ebscohost.com/ehost/detail?sid=b94a600e-b778-4433-bd18-
6400f0fc15d8%40sessionmgr10&vid=1&hid=14&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d
%3d#db=bwh&AN=bizwire.c36014360
6.http://www.moneycontrol.com/competition/unionbankindia/comparison/UBI01
7.http://www.docstoc.com/docs/1021354/Banking-Industry-Analysis (imp) .

http://www.managementparadise.com/forums/strategic-managementbankinginsurance/52883-
swot-analysis-indian-banking-sector.html

81