E-banking Mba Marketing Vtu Project_167969731 21702w

A RESEARCH REPORT ON

‘’Analysis of Consumer Satisfaction from E – Banking Services. SUBMITTED IN THE PARTIAL FULFILLMENT OF COURSE FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ISTRATION

Submitted To

Submitted By

Mr. Himanshu Goel

Fahad Mohammad Hussain Roll no-1608570029 MBA 4th Sem.

S.D. COLLEGE OF MANAGEMENT STUDIES MUZAFFARNAGAR 1

DECLARATION Hereby I declare that project report titled “Satisfaction from E – Banking services. A complete study of State Bank Of India. Submitted for the awarded degree of MASTER OF BUSINESS ISTRATION, is my original work and the project report has not formed the basis for the award of any diploma, degree, associate ship, fellowship or similar other titles. It has not been submitted to any other university or institution for the award of any degree or diploma.

Date:

Fahad Mohammad Hussain

Place:

MBA (4th sem) SDCMS (Marketing)

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

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PREFACE Someone has rightly said that practical experience is for better and closer to the real world then mere theoretical exposure. The practical experience helps the students view the real world closely, which in turn widely influences their perceptions and argument their understanding of the real situation. Research work constitutes the backbone of any management education program me. A management student has to do research work quite frequently during his entire span. The research work entitle ‘’To study the Customer satisfaction towards E-BANKING with reference to STATE BANK OF INDIA in Muzaffarnagar ” aims to analyze Ebanking various services provided by state bank of India. For this purpose MUZAFFARNAGAR city have been chosen. This particular project has been conducted at SBI. In the first phase of the research project, there is a introduction of Banking, company profile and products of SBI are given. After that a market research is performed with a sample size of 100 people. The research study was limited to Muzaffarnagar. Here, in my survey, I have ed the respondents through personal interviews with the help of questionnaires. The main objective of the research is to know the customer satisfaction level and their perception regarding SBI and to know the customer awareness regarding the SBI’s products. SBI should lay more stress on ments, both in print as well as in other media. Opening up the sector will certainly mean new products, better packaging and improved customer service. Both new and existing players will have to explore new distribution and marketing channels. Potential buyers for most of Banks lie in the middle class.

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EXECUTIVE SUMMARY

The report contains the organizational study done at STATE BANK OF INDIA. The report title is “CUSTOMER SATISFACTION REGARDIND STATE BANK OF INDIA”. The report gives an overview of the banking Sector and company profile. And awareness of customers about different types of products and services offered by SBI. This study was conducted to find out the customer satisfaction regarding SBI. The methodology adopted for the study was through a structured questionnaire, which is targeted to the different persons in Muzaffarnagar. For this purpose sample size of 100 was taken. The data collected from the different persons was analyzed thoroughly and presented in the form of charts and tables. SBI must regularly and create brand value for its products and services. Most of its competitors like ICICI, Axis, kotak Mahindra and nationalized banks use television ments to promote their products. The Indian consumer has a false perception about private banks – they feel that it would not safe. Safety and returns are the two main reasons people invest in banks. On the whole SBI is a good place to work at. Every new recruit is provided with extensive training on the products of SBI. This training enables an advisor/sales manager to market the policies better. The company should try to create awareness about itself in India. . With an improvement in the sales techniques used, a fair bit of advertising and modifications to the existing product portfolio, SBI would be all set to capture the banking market in India as it has around the globe.

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CONTENTS Title

Page No.



Introduction to the study

07-22



Introduction to the Industry

23-30



Company Profile

31-53



Research Methodology

54

- Title of the study

55

- Objective of the study

56

- Type of research

57-58

- Method of data collection

59-60

- Scope of study

61

- Limitation of study

62



Data Analysis and Interpretation

63-91



Facts and Findings

92-93



Conclusion

94



Recommendation and Suggestions

95



Appendix

96-98



Bibliography

99

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INTRODUCTION OF THE STUDY Literature Review 

Daniel

(1999)

defines

electronic

banking

as

the

delivery

of banks' information and services by banks to customers via different delivery platforms that can be used with different terminal devices such as a personal computer and a mobile phone with browser or desktop software, telephone or digital television. 

According to Birch and Young (1997) analyzed the consumer side for e-banking and the results showed that consumers basically seek for transactional efficiency, choice for core and non-core banking products and access to competitive prices and returns

•

Simpson (2002) suggests that e-banking is driven largely by the prospects of operating costs minimization and operating revenues maximization. A comparison of online banking in developed and emerging markets reveal that in developed markets lower costs and higher revenues are more noticeable.

•

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

•

Mols (1999) acknowledged that the internet banking is an innovative distribution channel that offers less waiting time and a higher spatial convenience than traditional branch banking with significantly lower cost structure than traditional delivery channels. Internet banking reduces not only operational cost to the bank but also leads to higher levels of customer satisfaction and retention. As a result internet banking is very attractive to banks and consumers, who now have higher acceptance to new technology.

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

Problem statement The e- banking services has not yet accepted to appreciable level in cities other than metros. To penetrate further in market, banks need to make strategy to deal with creating awareness and preference towards banking. The study is undertaken to know awareness and preference towards e-banking services of STATE Bank of INDIA in Muzaffarnagar. E – BANKING: Businesses operating as banks today may be insurance companies, auto manufacturers offering their own loan services, or retailers with branded low-interest credit cards. In a global marketplace characterized by rapid deregulation, mergers and acquisitions, pervasive wireless computing, and a proliferation of companies offering services that once were solely the domain of banks, no bank can afford to stand with its existing business model. Around the world, banks are facing new challenges in their battle to compete successfully. As ease of entry increases, competition to provide banking services will constantly grow and change. Business and residential clients will be more independent in their selection of services, especially with the creation of online banking services, where they can easily select the packages best suited to their needs. Customer attraction and loyalty will be increasingly hard-earned, while operational costs and time to market will need to be reduced and closely controlled.

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Need for e-commerce banking solutions On top of these developments, the exploding volume and complexity of transactional data that banks must manage and use effectively is straining the capabilities of many IT infrastructures to operate profitably. Increasingly, the goal of leading banking institutions is to offer the global market a diversified range of financial products and services via a single e-commerce portal. Broadly defined, ecommerce is all the transactional commerce conducted electronically between businesses and other businesses (B2B), between businesses and their end-customers (B2C) and within an enterprise, over the Internet, extranets and intranets. Many industry analysts foresee an accelerating growth in “e-markets” – frictionless global networks that link multiple buyers and sellers together to provide high-volume commercial transactions with high security, dynamic pricing and significant cost savings. In the area of pervasive computing, IBM estimates that by 2003, there will be 2.6 billion network access devices worldwide, including cell phones and hand-held computers. Whatever the forecasts, it is clear that e-commerce is coming, and the financial markets will reward those firms that best exploit the power of the Internet. But in the intensely competitive networked banking marketplace, the demands of ecommerce go far beyond simple interconnection. Competitive demands have made clear the need for banks to stay at the cutting edge of e-commerce technology so they can provide high levels of service all the time, anywhere, over any communications channel. Banks need ecommerce systems that are integrated with the entire chain of back office and business decision processes for optimum flexibility, responsiveness to changing market requirements and profitability. The time for advanced e-commerce is now if you don’t want to be left behind by your traditional and new competitors. To achieve and maintain an edge on its competition, a bank needs an open e-commerce platform that can: • Integrate new e-commerce applications with existing applications to optimize IT investments and save on reprogramming and management costs • Provide the power and scalability to handle multiple workloads, shift resources to match changing workloads, handle unpredictable peaks, and grow with your business • Provide rock-solid security and advanced services availability for transactions all the time, around the world – absolute essentials for competitive banking 9

• Exploit the value of your customer and market data by deploying business intelligence (BI) and customer relationship management (CRM) software to help you better anticipate, understand and respond to customer wants and needs •Unify your enterprise management chain with an open server platform that integrates purchase and sales processes with information on customers and product offerings for more timely, targeted and personalized customer service • Integrate future technologies and new ways of doing business with customers.

Banking structure in India Scheduled Banks in India (A) Scheduled Commercial Banks

Public sector Banks (28)  Nationalized Bank  Other Public Sector Banks (IDBI)  SBI and its Associates

Private sector Banks

Foreign Banks in India

Regional Rural Bank

(27)

(29)

(102)

(B) Scheduled Cooperative Banks

Scheduled Urban Cooperative Banks (55)

Scheduled State Cooperative Banks (31)

Here we more concerned about private sector banks and competition among them. Today, there are 27 private sector banks in the banking Sector: 19 old private sector banks and 8 new private sector banks. These new banks have brought in state-of-the-art technology and aggressively marketed their products. The Public sector banks are facing a stiff competition from the new private sector banks. The banks which have been setup in the 1990s under the guidelines Of the Narasimham Committee are referred to as NEW PRIVATE SECTOR BANKS. 10

ROLE OF E – BANKING IN THE BANKING SECTOR:

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

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

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

banking at 10paise per transaction. The cost-conscious banks in the country have therefore actively considered use of the Internet as a channel for providing services. Fully computerized banks, with better management of their customer base are in a stronger position to cross-sell their products through this channel. The online population has increased from just 500,000 in 1998 to 5 million in 2000. By 2015, the online population is expected to reach 70 million. IT services is a $1.5 billion industry in India growing at a rate of 55% per annum. Banks providing Internet banking services have been entering into agreements with their customers setting out the and conditions of the services. The and conditions include information on the access through -id and secret , minimum balance and charges, authority to the bank for carrying out transactions performed through the service, liability of the and the bank, disclosure of personal information for statistical analysis and credit scoring also, non-transferability of the facility, notices and termination, etc. These services are being initiated by banks like ICICI Bank Ltd., Citibank, Global Trust Bank Ltd., UTI Bank Ltd., Bank of Citibank Bank of Madura Ltd., Federal Bank Ltd., etc. Indian Government has introduced the Information Technology Bill, which has already been notified in October 2000. Section 72 of the Information Technology Act, 2000 casts an obligation of confidentiality against disclosure of any electronic record, , correspondence and information, except for certain purposes and violation of this provision is a criminal offence. Notification for appointment of Authorities to certify digital signatures, ensuring confidentiality of data, is likely to be issued in the coming months. Comprehensive enactments like the Electronic Funds Transfer Act in U.K. and data protection rules and regulations in the developed countries are in place abroad to prevent unauthorized access to data, malafide or otherwise, and to protect the individual’s rights of privacy. The legal issues are, however, being debated in our country and it is expected that some headway will be made in this respect in the near future The banking industry is expected to be a leading player in internet-business. While the banks in developed countries are working primarily via Internet as non-branch banks, banks in the developing countries use the Internet as an information delivery tool to improve relationship with customers. In early 2001, approximately 60 percent of internet -business in the UK was concentrated in the financial services sector, and with the expected 10-fold increase of the British internet -business market by 2004, the share of the financial services will further increase. Around one fifth of Finish and Swedish bank customers are banking online, while in the US, online banking is growing at an annual rate of 60 percent and the numbers of online s are expected to reach 15 million by 2003. 14

Banks have established an Internet presence with various objectives. Most of them are using the Internet as a new distribution channel. Financial services, with the use of Internet, may be offered in an equivalent quantity with lower costs to the potential customers. There may be s from each corner of the world at any time of day or night. This means that banks may enlarge their market without opening new branches. The banks in the US are using the Web to reach opportunities in three different categories: to market information, to deliver banking products and services, and to improve customer relationship. In 2001, over 50 percent of the banks in the US were offering internet -banking services. However, large banks appeared to have a clear advantage over small banks in the range of services they offered. Some banks in the US were targeting their Internet strategies towards business customers. Apart from affecting the way customers received banking services; internet -banking was expected to influence the banking industry structure. The economics of internet -banking was expected to favor large banks because of economies of scale and scope, and the ability to heavily. Moreover, internet -banking offered entry and expansion opportunities that small banks traditionally lacked. The major factor restricting growth of internet -banking is security, in spite of several countries being well connected via Internet. Access to high-quality internet -banking products is an issue as well. Majority of banks in Asia are just offering basic services compared with those of developed countries. Still, internet -banking seems to have a future in Asia. According to McKinsey survey, internet -banking will succeed if the basic features, especially bill payment, are handled well. Bill payment was the most popular feature, cited by 40 percent of respondents of the survey. Growth in Internet Banking

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

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• Competition The competitive pressure is the chief driving force behind increasing use of internet banking technology, ranking ahead of cost reduction and revenue enhancement. Banks see internet banking as a way to keep existing customers and attract new ones to the bank. • Cost efficiencies Banks can deliver banking services on the internet at transaction costs far lower than traditional ways. The actual costs to execute a transaction will vary depending on the delivery channel used. These costs are expected to continue to decline. • Geographical Reach Internet Banking allows expanded customer through increased geographical reach and lower cost of delivery channels. In fact, some banks are doing business exclusively via the internet – they do not have traditional banking offices and only reach their customers online. • Branding Relationship building is a strategic priority for most banks. Internet banking technology and products can provide a means for banks to develop and maintain an ongoing relationship with their customers by offering easy access to a broad array of products and services. By capitalizing on brand identification and by providing a broad array of financial services, banks hope to build customer loyalty, and enhance repeat businesses. Customer Demographics Internet banking allows banks to offer a wide array of options to their banking customers. Some customers will rely on traditional branches to conduct their banking business. Other customers are early adopters of new technologies that arrive in the marketplace. The challenge to banks is to understand their customer base and find the right mix of delivery channels to deliver products and services profitably to their various market segments. As use of the internet continues to expand, more banks are using the web to offer products and services or otherwise enhance communications with consumers. The internet offers the potential for safe, fast, and convenient new ways to shop for financial services and conduct banking business, any day, any time.

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TYPES OF RISKS ASSOCIATED WITH INTERNET BANKING Operational Risk:  Operational risk, also referred to as transactional risk is the most common form of risk associated with internet banking. 

It takes them from of inaccurate processing of transactions, non-enforceability of contracts, compromises in data integrity, data privacy and Confidentiality, unauthorized access / intrusion to bank’s systems and transaction, etc.



Such risks can arise out of weaknesses in design, implementation and monitoring of banks information system.

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

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 A system allowing communications with all protocols, say HTTP (Hyper Text Transfer Protocol), FTP (File Transfer Protocol), telnet, etc. is more prone to attack than one designed to permit say, only HTTP.  Many banks rely on outside service providers to implement, operate and maintain their e-banking system. 

Security related operational risk include access control, use of firewalls, cryptographic techniques, public key encryption, digital signature, etc.

Reputation Risk:  Reputation risk is the risks of getting significant negative public opinion, which may result in a critical loss of funding or customers. Such risks arise from actions, which cause major loss of the public confidence in the banks’ ability to perform critical functions or impair bank-customer relationship. It may be due to banks’ own action or due to third parties action.  The main reasons for this risk may be system or product not working to the expectations of the customers, significant security breach (both due to internal and external attack), inadequate information to customers about product use and problem resolution procedures, significant problems with communication networks that impair customers’ access to their funds or information especially if, there are, no alternative means of access. Legal Risk:  Legal risk arises from violation of, or non-conformance with laws, rules, regulations, or prescribed practices, or when the legal rights and obligations of parties to a transaction are not well established.  A customer inadequately informed about his rights and obligations, may not take proper precautions in using Internet banking products or services, leading to disputed transactions, unwanted suits against the bank or other regulatory sanctions. Money Laundering Risk:  As internet-banking transactions are conducted remotely, banks may find it difficult to apply traditional method for detecting and preventing undesirable criminal activities. Application of money laundering rules may also be inappropriate for some forms of electronic payments.  To avoid this, banks need to design proper customer identification and screening techniques, develop audit trails, conduct periodic compliance reviews, and frame policies in internet transactions. 18

Cross-Border Risks:  Internet banking is based on technology that, by its very nature, is designed to extend the geographic reach of banks and customers. Such market expansion can extend beyond national borders. This causes various risks. 

Such considerations may expose banks to legal risks associated with noncompliance of different national laws and regulations, including consumer protection laws, record keeping and reporting requirements, privacy rules and money laundering laws.

 The foreign-based service provider or foreign participants in internet banking are sources of country risk to the extent that foreign parties become unable to fulfill their obligations due to economic, social or political factors. Strategic Risk:  For reducing such risk, banks need to conduct proper survey, consult experts from various fields, establish achievable goals and monitor performance.  In addition, they need to analyze the availability and cost of additional resources, provision of adequate ing staff, proper training of staff and adequate insurance coverage. Other Risk: Traditional banking risks such as credit risk, liquidity risk, interest rate risk and market risk are also present in internet banking. These risks are intensified due to the very nature of internet banking on of use of electronic channels as well as absence of geographical limits. Credit risk: Is the risk that a counterparty will not settle an obligation for full value, either when due or at any time thereafter. Banks may not be able to properly evaluate the creditworthiness of the customer while extending credit through remote banking procedures, which could enhance the credit risk. Another facility of internet banking is electronic money. It brings various types of risks associated with it. If a bank purchases e-money from an issuer in order to resell it to a customer, it exposes itself to credit risk in the event of the issuer defaulting on its obligation to redeem electronic money. Liquidity risk: It is important for a bank engaged in electronic money transfer activities that it ensures that funds are adequate to cover redemption and settlement demands at any particular time. Failure to do so, besides exposing the bank to liquidity risk, may even give rise to legal action and reputation risk.

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REGULATORY TOOLS TO OVERCOME CHALLENGES There are four key tools that regulators need to focus on to address the new challenges posed by the arrival of internet -banking. Adaptation: In light of how rapidly technology is changing and what the changes mean for banking activities, keeping regulations up to date has been, and continues to be, a far-reaching, time-consuming, and complex task. In May 2001, the Bank for International Settlements issued its "Risk Management Principles for internet banking," which discusses how to extend, adapt, and tailor the existing risk-management framework to the electronic banking setting. Legalization: New methods for conducting transactions, new instruments, and new service providers will require legal definition, recognition, and permission. For example, it will be essential to define an electronic signature and give it the same legal status as the handwritten signature. Harmonization: International harmonization of electronic banking regulation must be a top priority. This means intensifying cross-border cooperation between supervisors and coordinating laws and regulatory practices internationally and domestically across different regulatory agencies. The problem of jurisdiction that arises from "borderless" transactions is, as of this writing, in limbo. Integration: This is the process of including information technology issues and their accompanying operational risks in bank supervisors' safety and soundness evaluations. In addition to the issues of privacy and security, for example, bank examiners will want to know how well the bank's management has elaborated its business plan for electronic banking. In the era of globalization each and every sector faced the stiff competition from their rivals and world also converted into the flat from the globe. After the policy of liberalization and RBI initiatives to take the step for the private sector banks, more and more changes are taking the part into it. That are create competition between the private sector banks and public sector bank. Private sector banks are today used the latest technology for the different transaction of day to day banking life. As we know that Information Technology plays the vital role in the each and every industry and gives the optimum return from the limited resources. 20

Product and Services Offered:

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



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



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



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



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



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



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



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



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



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

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Banking services through internetThere are basically, 3 E- Banking service Levels provided by banks. These are discussed as below:i.

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

ii.

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

iii.

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

22

INTRODUCTION TO THE INDUSTRY

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

modern

sense

evolved

in

rich

cities

of Renaissance

Italy,

such

as Florence, Venice and Genoa. In the history of banking, a number of banking dynasties— among them. Origin of the word: The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank "bench, counter". Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. Another possible origin of the word is from the Sanskrit words (ब्यय) 'byaya' (expense) and 'onka' (calculation) = byaya-onka. This word still survives in Bangla, which is one of Sanskrit's child languages. ববব্যায + অঙ = ববব্যাঙ . Such expense calculations were the biggest part of mathematical treatises written by Indian mathematicians as early as 500 B.C. Banking in India in the modern sense originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1770; both are now defunct. The oldest bank still in existence in 23

India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. History: In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC). Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, there was considerable use of these instruments. Merchants in large towns gave letters of credit to one another. Colonial era: During the colonial era merchants in Calcutta established the Union Bank in 1839, but it failed in 1840 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest t Stock bank in India, it was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French possession, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The first entirely Indian t stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian economy was ing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. 24

The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The favor of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalized banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". Indian banking industries The Indian banking market is growing at an astonishing rate, with Assets expected to reach US$1 trillion by 2010.

An expanding Economy,

middle class,

and technological

innovations are all Contributing to this growth. The country’s middle class s for over 320 million people. In correlation with the growth of the economy, rising income levels, increased standard of living, and affordability of banking products are promising factors for continued expansion.

The Indian banking Industry is in the middle of an

IT

revolution, focusing on the

expansion of retail and rural banking. Players are becoming increasingly customer - centric in

their approach, which has resulted in innovative methods of offering new banking

products and services.

Banks are now realizing 25

the importance of being a big player and

are beginning to focus their attention on mergers

and acquisitions to take advantage of

economies of scale and/or comply with Basel II

regulation. “Indian banking industry

assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital,” says Prathima Rajan, analyst in Celent's banking group and author of the report.“The banking industry should focus on having a small number of large players that can compete globally rather than having a large number of fragmented players." Foreign banks in India By 2009 to 2010 few more names is going to be added in the list of foreign banks in India. This is as an aftermath of the sudden interest shown by Reserve Bank of India paving roap for foreign banks in India greater freedom in India. Among them is the world's best private bank by Euro Money magazine, Switzerland's UBS. The following are the list of foreign banks going to set up business in India:        

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

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

Years Number of banks Authorised capital Paid-up Capital 26

that failed

(Rs. Lakhs)

(Rs. Lakhs)

1913 12

274

35

1914 42

710

109

1915 11

56

5

1916 13

231

4

1917 9

76

25

1918 7

209

1

Post-Independence: The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. The Reserve Bank of India, India's central banking authority, was established in April 1935, but was nationalized on January 1, 1949 under the of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b). In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India". The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors. Nationalization in the 1960s

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

27

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

Ministry of Finance RBI Scheduled Banks

Commercial Banks

Public sector Banks

Private sector Banks

Foreign Banks

Cooperative Banks

Regional Rural Banks

Reserve Bank of India:

28

Urban Cooperative

State Cooperative

The RBI is India's central bank. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. RBI acts as a banker to the Government and Banks. The Central Bank maintains record of Government revenue and expenditure under various heads. It maintains deposit s of all other banks and advances money to other banks, when needed. Another important function of the Central Bank is the issuance of currency notes, regulating their circulation in the country by different methods. Scheduled Banks: All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are scheduled banks. These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. The type of banks comes under these Scheduled Commercial Banks and Scheduled Cooperative Banks can be seen in the above figure. All most all banks are Scheduled banks in India. Commercial Banks: Commercial banks may be defined as, any banking organization that deals with the deposits and loans of business organizations. Commercial banks issue bank checks and drafts, as well as accept money on term deposits. Commercial banks also act as moneylenders, by way of installment loans and overdrafts. Commercial banks also allow for a variety of deposit s, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals. Public Sector Banks: These are banks where majority stake is held by the Government of India. Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc. Private Sector Banks: These are banks majority of share capital of the bank is held by private individuals. These banks are ed as companies with limited liability. Examples of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks: 29

These banks are ed and have their headquarters in a foreign country but operate their branches in our country. Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc. Regional Rural Banks: Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th September 1975 and the RRB Act, 1976 with an objective to ensure sufficient institutional credit for agriculture and other rural sectors. The area of operation of RRBs is limited to the area as notified by GoI covering one or more districts in the State. RRBs are tly owned by GoI, the concerned State Government and Sponsor Banks (27 scheduled commercial banks and one State Cooperative Bank); the issued capital of a RRB is shared by the owners in the proportion of 50%, 15% and 35% respectively. Prathama bank is the first Regional Rural Bank in India located in the city Moradabad in Uttar Pradesh. Co-operative Banks: A co-operative bank is a financial entity which belongs to its , who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide their with a wide range of banking and financial services (loans, deposits, banking s, etc). They provide limited banking products and are specialists in agriculture-related products. Cooperative banks are the primary financiers of agricultural activities, some small-scale industries and self-employed workers. Co-operative banks function on the basis of "no-profit no-loss". Anyonya Co-operative Bank Limited (ACBL) is the first co-operative bank in India located in the city of Vadodara in Gujarat.

COMPANY PROFILE 30

Bank Name:

State Bank of India

Branch Name:

MUZAFFARNAGAR

Branch

Code: 112743

Address:

RAILWAY ROAD

City:

MUZAFFARNAGAR

State:

Uttar Pradesh

Phone:

0131-2408091

Micr Code:

582002004

IFSC Code:

SBIN0000685

RTGS:

YES

Core banking:

Available

Website:

http://www.sbi.co.in

Internet Banking Site

https://www.onlinesbi.com

A) Background and Inception: 31

State Bank of India (SBI) is banking and financial services based company in India. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2012, it had assets of US$360 billion and 14,119 branches, including 173 foreign offices in 37 countries across the globe making it the largest banking and financial services company in India. State Bank of India (SBI) is the nation's largest and oldest bank. Tracing its roots back some 200 years to the British East India Company (and initially established as the Bank of Calcutta in 1806) also owns majority stakes in five associate banks. The bank has other units devoted to capital markets, fund management, factoring and commercial services, credit cards, insurance, and brokerage services. The Reserve Bank of India owns about 60% of State Bank of India. History: The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as t stock companies and were the result of the royal charters (a formal document issued by a British monarch as letters patent, granting a right or power to an individual or a body corporate). These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on 27 January 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a t stock company. Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority. In 1959, the government ed the State Bank of India (Subsidiary Banks) Act, which made eight state banks associates of SBI.

Current Board of Directors:

32

After the end of Om. Prakash Bhatt's reign as SBI chairman on 31 March 2011, the post was taken over by Pratip Chaudhuri, who is the former deputy managing director of the international division of SBI. As of 4 August 2011, there are twelve in the SBI board of directors. Associate Banks: SBI has five associate banks; all use the same logo of a blue circle and all the associates use the "State Bank of" name, followed by the regional headquarters: State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore

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

C) Vision, Mission and Quality Policy: 33

Vision statement: My SBI My Customer first. My SBI: first in customer satisfaction Mission statement: We will be prompt, polite and proactive with our customers. We will speak the language of young India. We will create products and services that help our customers achieve their goals. We will go beyond the call of duty to make our customers feel valued. We will be of service even in the remotest part of our country. We will offer excellence in services to those abroad as much as we do to those in India. We will imbibe state-of-the-art technology to drive excellence. Values: We will always be honest, transparent and ethical. We will respect our customers and fellow associates. We will be knowledge driven. We will learn and we will share our learning. We will never take the easy way out. We will do everything we can to contribute to the community we work in. We will nurture pride in India.

D) Products and Services Profile: 34

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

Services

Khata

Access to multiple s

Khata Plus

view / Statement

Saral

Funds Transfer

Vyapaar

Third party funds transfer (RTGS/NEFT)

Vistaar

Demand Draft request

Electronic Vendor Finance

Utility Bill Payment

Electronic Dealer Finance

Bulk transaction through file

Direct Debit

Direct and indirect tax payment

E-Collection

SMS/Email alerts Products:

Khata: Derive an advantage over others; advantage of accessing your s 24 X 7. Khata enables you to access your information anywhere anytime. You will have the following advantages: 

Enquiry rights on the s



Facility to view information and statement of your .



Suitable for single operated s.

Khata Plus: 35

Derive an added advantage over others by getting multiple accesses to your s 24 X 7. Khata Plus enables multiple people in your business to access your information anywhere anytime. Saral: Single operated, friendly and simple. Transaction rights on the s. Facility to view information and statement of your . Facility to transfer your funds to: SBI s(other than your own s) Consolidated limit per day Rs.5.00 Lacs Other Bank s (RTGS/NEFT) --- Consolidated limit per day Rs.5.00 Lacs Merchant Payments --- Consolidated limit per day Rs.5.00 Lacs Vyapaar: Exercise the privilege to transact over the internet, make payments the cyber way, conduct business in style. Equip with Vyapaar and facilitate your business needs. Vistaar: Freedom to operate your business at any geographical location from wherever you desire. Freedom to take urgent financial decisions from any situation. Freedom to empower your people to conduct business the modern way yet within the framework laid down by you. Freedom from branch dependency. Electronic Vendor Finance: Electronic Vendor Financing Scheme (e-VFS ) and Electronic Dealer Financing Scheme (eDFS) State Bank of India introduces Supply Chain Finance by leveraging its state of the art technology for the convenience of the customers. SCF will strengthen the relationship of SBI with the Corporate World by financing their supply chain partners. Electronic Dealer Finance: Electronic Vendor Financing Scheme (e-VFS ) and Electronic Dealer Financing Scheme (e-DFS) State Bank of India introduces Supply Chain Finance by leveraging its state of the art technology for the convenience of the customers. SCF will strengthen the relationship of SBI with the Corporate World by financing their supply chain partners. Direct Debit: 36

Direct debit is a facility given to Corporate (Suppliers) having Vistaar facility and supplying goods to their Dealers (Dealers need not be availing INB facility) whereby the Corporate (Supplier) can directly debit the s of their dealers maintained at SBI branches at different locations. In this facility the Supplier and the Bank will enter in to a bipartite agreement, based on which, the Dealer will provide a mandate to the supplier for debiting his up to a specific limit. Services: view / Statement: OnlineSBI can generate an statement for a date range for any of your s. The statement includes transaction details, opening, closing and accumulated balance in the . Funds Transfer: 

You can now avail a bouquet of funds transfer services through Internet banking



Transfer funds within your own s



Transfer funds to third party held in the same bank



Make an Inter bank funds transfer to any held in any bank including State Bank Group



Pay any VISA credit card bill



Transfer funds to religious and charitable institutions



Record standing instructions to transfer a fixed amount at a scheduled frequency for a period not exceeding one year



Transfer funds to NRE PIS s to facilitate online trading



Third party funds transfer (RTGS/NEFT)

Inter Bank Transfer: enables electronic transfer of funds from the of the remitter in one Bank to the of the beneficiary maintained with any other Bank branch. There are two systems of Inter Bank Transfer - RTGS and NEFT. Both these systems are maintained by Reserve Bank of India. Demand Draft request: OnlineSBI enables customers to issue demand drafts online. Customer has the option to collect the draft from branch or give his mandate to dispatch the draft by courier to the beneficiary. Bill Payment: 37

Many categories of Billers are available for payment using OnlineSBI. For e.g. Credit Card, Insurance, Telephone Payment etc. Utility Bill Payment: SBI e-PAY - A simple and convenient service for receiving and paying your bills online 

No more late payments



No more queues



No more hassles of depositing cheques



Direct and indirect tax payment

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

Offline Products/Services: 38

PRODUCTS/SERVICE PROFILE SBI Term Deposits

SBI Loan For Pensioners

SBI Recurring Deposits

Loan Against Mortgage Of Property

SBI Housing Loan

Loan Against Shares & Debentures

SBI Car Loan

Rent Plus Scheme

SBI Educational Loan

Medi-Plus Scheme

SBI Personal Loan

Rates Of Interest

SBI Current

Savings plus

SBI Savings bank

Basic banking ‘no frills ’

Special term deposits

savings

Multi option deposits scheme Demat PERSONAL BANKING- State bank of India offers a wide range of services in the Personal Banking Segment which are indexed here. GOLD BANKING Retail sale of gold coin FAQ-Gold deposits scheme

Gold deposits scheme(GDS) Sale of gold and gold metal loans

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

DOMESTIC TREASURY BROKING SERVICES REVISED SERVICE CHARGES ATM SERVICES INTERNET BANKING STATE BANK MOBICASH E-PAY E-RAIL RBIEFT SAFE DEPOSIT LOCKER MICR CODES FOREIGN INWARD REMITTANCES 39

MOBILE BANKING State Bank Freedom – Your Mobile Your Bank Away from home, balance enquiries can be made and/or money sent to the loved ones or bills can be paid anytime 24x7!!! That is what State Bank FreedoM offers -convenient, simple, secure, anytime and anywhere banking. 1. Mobile Banking Service over Application/ Wireless Application Protocol (WAP) The service is available on java enabled /Android mobile phones (with or without GPRS) where the is required to the application on to the mobile handset. The service can also be availed via WAP on all phones (java/non java) with GPRS connection. The following functionalities are available: 

Funds transfer (within and outside the bank)



Interbank Mobile Payment Services (IMPS):



Enquiry services (Balance enquiry/ Mini statement)



Cheque book request



Demat Enquiry Service



Bill Payment (Utility bills, credit cards, Insurance ), Donations, Subscriptions



Mobile Top up



M Commerce (Top up of Tatasky, BigTV, SunDirect, DishTV, DigitalTV and Videocon d2h connections, SBI life insurance )

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

Enquiry Services (Balance Enquiry/Mini Statement)

•

Mobile Top up

•

DTH Top up/ recharge

•

IMPS- Mobile to Mobile Transfer

•

Change MPIN 40

•

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

3. Mobile Banking Service over USSD (Unstructured Supplementary Service Data) The service is available on all phones (java/non java) with/without GPRS connection. No need to the application. The following functionalities are available: •

Enquiry Services (Balance Enquiry/Mini Statement)

•

Mobile Top up

•

Funds Transfer (within Bank)

41

ATM SERVICES STATE BANK NETWORKED ATM SERVICES State Bank offers you the convenience of over 26,000 ATMs in India, the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks - namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore) and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cumDebit (Cash Plus) card. KINDS OF CARDS ACCEPTED AT STATE BANK ATMs Besides all cards of State Bank of India, State Bank ATM-Cum-Debit Card and State Bank International ATM-Cum-Debit Cards following cards are also accepted at State Bank ATMs: 1) State Bank Credit Card 2) Cards issued by other banks displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos 3) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos State Bank ATM-cum-Debit (State Bank Cash plus) Card: India's largest bank is proud to offer you unparalleled convenience viz. State Bank ATMcum-Debit (Cash Plus) card. With this card, there is no need to carry cash in your wallet. You can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit Card. Get an ATM-cum-Debit card with which you can transact for FREE at any of over 26,000 ATMs of State Bank Group within our country.

E) Area of Operation – The business operations of SBI can be broadly classified into the key income generating areas such as... 42



National Banking



International Banking



Corporate Banking



Treasury operations



Associates and subsidiaries.

F) Ownership Pattern: Holder's Name

No of Shares

% Share Holding

Promoters

413252443

61.58%

Financial Institutions

79444729

11.84%

Foreign Institutions

65020546

9.69%

General Public

39345464

5.86%

NBanks Mutual Funds

35857120

5.34%

Other Companies

19510691

2.91%

Foreign NRI

1039352

0.15%

Others

824231

0.12%

Central Govt

195151

0.03%

Foreign Ocb

32310

0.00%

Foreign Collaborators

415

0.00%

Foreign Industries

296

0.00%

Competitors Information: Top performing Public & Private sector Banks: Some of the major competitors for SBI in the banking sector in Gadag city are 

ICICI Bank



HDFC Bank



Axis Bank



Syndicate Bank.

However in of average market share, SBI is by far the largest player in the market.

G) Infrastructural Facilities: The Bank is well equipped with good quality furniture’s, design, interior decoration and air condition enabled building, drinking water facility and good ambiance. The CC cameras have been introduced for customer’s safety. The layout of the building enables workflow easier for customers and good seating arrangement. the computer systems are well configured and 43

providing quick services to the customers and a large build-up area about 4000sq.ft. area with one ATM machine within the building located at Mulgund Road Gadag.

H) Recent awards and recognitions:         

Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010 The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine Best Bank – Large and Most Socially Responsible Bank by the Business Bank Awards 2009 Best Bank 2009 by Business India The Most Trusted Brand 2009 by The Economic Times Most Preferred Bank & Most preferred Home loan provider by CNBC Visionaries of Financial Inclusion By FINO Technology Bank of the Year by IBA Banking Technology Awards SKOCH Award 2010 for Virtual corporation Category for its e-payment solution The Brand Trust Report 11th most trusted brand in Hindustan.

44

I) Work flow model: For Deposits

Customers Deposit Application review and Documentation Processing Cash, Cheque and Draft s

For Loans:

Work done Customers Deposit Specific Requirements Filling of Application Application review Decision Document Repayment of Interest Loan disbursement

45

Reject

E – BANKING SERVICES PROVIDED BY STATE BANK OF INDIA-

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

1.

NET BANKING

Internet - Internet Banking service from IndusInd Bank offers banking services online with the same personal efforts that customers receive at the branch. The online requests are processed by a proactive team of Personal Bankers adhering to service quality standards. The Internet banking service provided by the bank adds more value to NRI's who can view their balances online and also effect funds transfer - just at the click of a mouse. Moreover, Internet banking has no time zones and is accessible round the clock without restricting it to any geographical boundary.

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

46

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

3. VISA MONEY TRANSFER VISA MONEY TRANSFER - [VISA CARD-to-CARD Transfer] No more waiting in queues in Bank branches, getting the Demand Drafts made, and writing cheques that takes days to clear, IndusInd Bank provides the only solution to make it simpler, convenient and faster by State Bank of India VISA Money Transfer. From State Bank of India , customers can now transfer money to any of the 23 million VISA Cards anywhere in India through SBI’s Net - State Bank of India’s Net Banking service and any of State Bank of India ATM.

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

47

availability of balance in the . One can also shop up to Rs 25000 per day using his/her debit card.  Funds Transfer- Flexibility to allow on-line transfer of funds between the various s linked with the ATM/Debit card of the customer.  Fast Cash- In spite of holding multiple s, the customers have the option of withdrawing cash through their primary only.  Visa Money Transfer- Visa Money Transfer is a revolutionary service which enables the customer of IndusInd Bank to transfer money from their debit card to any other visa debit /credit card anytime, anywhere in India.

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

1.

PHONE BANKING

The customers of State bank of India can now call on the toll free numbers 1800 22 00 61 (All MTNL & BSNL subscribers or 022-44066666 (Local call in Mumbai). State bank of India offers following facilities which the customers can avail with the help of phone banking service: 48

•

Balance Enquiry for Savings.

•

Reading out last 3 transactions.

•

Status of cheque issued by customer.

•

Stop payment of an issued cheque.

•

Detailed statement by FAX.

•

Internal funds transfer between 2 A/Cs.

•

Request for Cheque book.

•

Request debit card replacement.

•

Statement request for statement of A/C by mail or fax.

49

E – BANKING SERVICES PROVIDED BY OTHER BANKSDespite of various e-banking facilities provided by IndusInd bank, there are many services which the bank has not promoted as yet. As a suggestion measure, I may like to name and explain a few of it, which other banks have been providing from quiet a long time. I would like the Bank authorities to have a look at them and provide these services to its reputed customer base, and hence improve customer satisfaction and contentment. Some of these services are: -

1. TICKET BOOKING This service is provided by ICICI Bank. With this service customers need not visit reservation centers for booking tickets any more. They can buy their train tickets online and pay using the Internet Banking Facility of the bank. For this ICICI Bank has tied up with Indian Railway Catering and Tourism Corporation Ltd (IRCTC).This facility is available to all internet banking customers of ICICI Bank. For the purpose of making payment the customer’s Bank will be immediately debited and payment confirmation number will be provided. Tickets are booked immediately and PNR number is provided online to the customer, at Partner's website. Further, No cash will be paid at the time of cancellation. The customer’s bank will be credited with the ticket amount less cancellation charges as levied by IRCTC. ICICI Bank does not levy any cancellation charges.

50

2. SMART MONEY ORDER This facility is being provided by ICICI Bank. Smart Money Order is a service provided in partnership with India Post (The Department of Posts, Ministry of Communication and Information Technology, Government of India). Smart Money Order is a unique service that allows the customers to send a money order anytime and to any destination in India. All Retail Internet Banking Customers can use this facility. Under this, money is delivered at the receiver's doorstep.

3. ONE VIEW OneView is a revolutionary service from HDFC Bank that allows its customers to manage multiple s in different banks through one single online interface. If you are an HDFC Bank customer and have one or more s with Citibank, ICICI Bank, HSBC India, Standard Chartered Bank then OneView is just right for you. For this service, the customers don’t need to individually log on to internet banking of every . They just have to log on to One View and they can manage up to FIVE s in different banks. They will have to only ONE . And this service is provided absolutely FREE to the customers of HDFC Bank.

51

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

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

5. E-PAYMENTS Axis bank provides this e-banking facility to its customers. The Bank has entered into tie-ups with various Govt. Departments for providing various G2B and G2C online payment facility to the citizens and businesses thus providing convenience to them. Few of the important online payment tie-ups entered into by Axis Bank with various Govt. Departments is as under:

DGFT ePayments 52

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

6. ONLINE AUTHORISATION CODE (OAC) This service is currently being provided by CitiBank. The customers can order a Demand Draft online and have it delivered in over 700 locations in India. To do so, they will need an Online Authorisation Code (OAC) which is a one time process that has been introduced since November, 2006 in the Bank.

RESEARCH METHODOLOGY 53

PRIMARY DATA: In this research with a sample size of nearly 100 customer’s data will be available in form of questionnaire collected in of different questions influencing the use of internet banking. Internet Banking is considered as dependent on awareness among customers which will be studied with help of different independent variables. SECONDARY DATA: Collection of information from different kinds of books the data of company what they maintained. Most of the data has been collected from Bank Assistant Mr. Nagaraj Adavi and by official website of State Bank of India

TITLE OF THE STUDY

54

“Services provided by SBI through E-Banking with reference to SBI Branches in Muzaffarnagar city”. With reference to SBI Mulugund naka Branch Muzaffarnagar. Statement of the problem: 1. To compare the trust level of traditional Banking with e-Banking service marketing (consumer’s point of view). 2. To find the effectiveness & Reliability of Electronic Banking.

OBJECTIVES OF THE STUDY

55



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



To get aware of various aspects of E-banking.



To know the uses of e-Banking for customers.



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



To offer useful suggestions.



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

TYPE OF RESEARCH 56

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

RESEARCH DESIGN Reasearch design constitutes the blue print for the collection, measurement and analysis of data. The present study seeks to identify the extent of prefences of E – Banking over traditional banking among ser\vice class. The research design is descriptive in nature. The research design is descriptive in nature. The research has been conducted on customers of STATE BANK OF INDIA within MUZAFFARNAGAR. For the selection of the sample, Convenient sampling method was adopted and an attempt has been made to include all the groups and all gender class. A framework or blueprint for conducting the research project. It specifies the details of the procedures necessary for obtaining the information needed to structure and/or solve research problems. A good research design lays the foundation for conducting the project. A good research design will ensure that the research project is conducted effectively and efficiently. Typically, a research design involves the following components, or tasks:

 Define the information needed.  Design the research.  Specify the measurement and scaling procedures.  Construct and present a questionnaire or an appropriate form for data collection.  Specify the sampling process and sampling size.  Develop a plan of data analysis.

Despite of various e-banking facilities provided by IndusInd bank, there are many services which the bank has not promoted as yet. As a suggestion measure, I may like to name and explain a few of it, which other banks have been providing from quiet a long time. I would 57

like the Bank authorities to have a look at them and provide these services to its reputed customer base, and hence improve customer satisfaction and contentment. Some of these services are: -

METHOD OF DATA COLLECTION

58

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

Sources of the Data Data from two main sources were used,

Primary Data. Secondary Data. Data Collection Method: Primary sources Primary data was obtained through questionnaires filled by people residing the city of Muzaffarnagar and through direct communication with respondents in the form of Interview

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

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

Sampling method The consumers are selected by the convenience sampling method. The selection of units from the population based on their easy availability and accessibility to the researcher is known as 59

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

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

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

SCOPE OF THE STUDY

60



The study includes the services provided by SBI branches in Muzaffarnagar.



It investigates about all applications of online banking in SBI.



It would help society to understand the usefulness of electronic banking.



The study will also help us to get the knowledge about process of e-Banking and usefulness to banking industry.



As the study contains the 360 degree information regarding SBI and its e-Banking,



Hence the study will lead to new ways to tackle the problems and the SWOT of SBI in respect of e- Banking.

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

LIMITATIONS OF THE STUDY

61



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



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



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



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



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



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

DATA ANALYSIS & INTERPRETATION GENDER 62

Male

149

Female

50

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

OCCUPATION business

56

professional

59 63

student

54

employee

50

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

ANNUAL INCOME below 1 lac

46

1-2 lac

60

2-3 lac

51 64

3-4 lac

27

4 lac & above

15

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

USE E-BANKING yes

82

65

no

117

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

Aware of the online service provided Yes

82

66

No

0

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

Aware of internet banking charges Yes

65 67

NO

17

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

Preference for E-Banking product

68

RANK rank-1 rank-2 rank-3 rank-4 rank-5 rank-6 rank-7 rank-8 Total

ATM 25 30 14 1 3 4 2 3 82

Bill

fund

online

online

credit

E-

Bank

payment 28 28 9 6 2 3 3 3 82

transfer 10 5 33 9 5 7 7 6 82

investment 3 5 6 25 20 4 10 9 82

shoping 4 5 9 22 23 10 4 5 82

card 2 2 4 3 8 18 14 31 82

ticket 3 4 3 11 13 25 17 6 82

statement 7 6 3 5 4 13 26 18 82

Interpretation: People give importance to service of state bank of India which are ranking as Bill payment, ATM, Fund transfer, online investment, online shopping, E-Ticket, Bank statement respectively . 5Reason for using E-banking save

time Any time access

&money

Tax payment

Reduce istrative overhead

69

Reason for using

17

38

04

23

E-banking

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

Rank the following Services of state bank of India view rank-1

bill

fund

statement payment transfer 30 30 16

new

debit

credit card transaction fund

card

payment 2

statement 4

70

statement 3

transfer 0

rank-2 rank-3 rank-4 rank-5 rank-6 rank-7 Total

27 13 4 1 1 6 82

28 12 3 3 4 2 82

5 35 13 4 3 6 82

6 9 27 6 10 22 82

3 7 25 26 9 9 82

3 3 9 28 29 10 82

8 6 3 11 24 26 82

Interpretation: People give importance to service of state bank of India which are ranking as :view statement, bill payment, fund transfer, credit card

payment, transaction

statement, new fund transfer, debit card statement respectively. Rank the following Statements to your Agreement easy

fast

accurat

services

fund

lesse

provide

banki

and

ely

are

transfer

ns

ng

eas

bankin

trustwor

service is the

trasact y

g

thy and easy

huma

ions

queries

secure

n

er

errors

bankin fees

71

sav

anyti

lowe easy

d 24X7 es

me

r

stable

tim

and

trans historical

es

anywh actio n

access

transaction

data

g facilit y strongly agree Agree moderate disagree strongly

15 38 27 1

14 22 31 14

11 27 33 11

16 32 22 11

21 31 21 9

22 35 14 7

28 30 21 3

20 41 15 6

35 27 16 4

20 41 14 6

35 27 16 4

disagree

1 82

1 82

0 82

2 82

0 82

4 82

0 82

0 82

0 82

1 82

0 82

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

72

Rate your Satisfaction with E-Banking view

rank-1 rank-2 rank-3 rank-4 rank-5 rank-6 rank-7

new

debit



bill

fund

credit card transaction fund

card

statement 30 27 13 4 1 1 6

payment 30 28 12 3 3 4 2

transfer 16 5 35 13 4 3 6

payment 2 6 9 27 6 10 22

statement 4 8 6 3 11 24 26

73

statement 3 3 7 25 26 9 9

transfer 0 3 3 9 28 29 10

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

Do E-banking Do E-banking N

Valid

100

Missing

0

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

100

100.0

100.0

100.0

YES

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

74

Statistics come to know about E-Banking N

Valid Missing

100 0

come to know about E-Banking Frequency Valid

Percent

Valid Percent

Cumulative Percent

Friends

39

39.0

39.0

39.0

Family

7

7.0

7.0

46.0

Relatives

16

16.0

16.0

62.0

Bank officials

20

20.0

20.0

82.0

ments

18

18.0

18.0

100.0

100

100.0

100.0

Total

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

75

Statistics feel E-Banking services necessary

are

N

100

Valid Missing

0

feel E-Banking services are necessary Frequency Valid

Percent

Valid Percent

Cumulative Percent

YES

73

73.0

73.0

73.0

NO

27

27.0

27.0

100.0

100

100.0

100.0

Total

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

76

Statistics reasons for choosing SBI E-Banking Services N

Valid

130

Missing

0

reasons for choosing SBI E-Banking Services Frequency Valid

Percent

Valid Percent

Cumulative Percent

Convenience

63

48.5

48.5

48.5

24 Hour Access to s

34

26.2

26.2

74.6

To Save Time

17

13.1

13.1

87.7

Other's

16

12.3

12.3

100.0

130

100.0

100.0

Total

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

77

Statistics services Customers think are more friendly N

Valid

100

Missing

0

services Customers think are more friendly Frequency Valid

Percent

Valid Percent

Cumulative Percent

Internet Banking

58

58.0

58.0

58.0

ATM services

14

14.0

14.0

72.0

Telephone Banking

28

28.0

28.0

100.0

100

100.0

100.0

Total

Customers who think services are more friendly 

 

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

78

Statistics Uses SBI online services N

Valid Missing

100 0

Uses SBI online services Frequency Valid

Percent

Valid Percent

Cumulative Percent

Daily

17

17.0

17.0

17.0

Monthly

43

43.0

43.0

60.0

Weakly

24

24.0

24.0

84.0

Never

16

16.0

16.0

100.0

Total

100

100.0

100.0

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

79

Statistics Products& Services customers use regularly N

Valid

138

Missing

0

Products& Services customers use regularly Frequency Valid

Percent

Valid Percent

Cumulative Percent

statement

62

44.9

44.9

44.9

E-ticketing

32

23.2

23.2

68.1

Checkbook request

12

8.7

8.7

76.8

E-payment

16

11.6

11.6

88.4

Transaction enquiry

16

11.6

11.6

100.0

138

100.0

100.0

Total

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

80

Statistics Make purchasing through E-Banking N

Valid

100

Missing

0

Make purchasing through E-Banking Frequency Valid

YES NO Total

48

Percent

Valid Percent

48.0

Cumulative Percent

48.0

48.0 100.0

52

52.0

52.0

100

100.0

100.0

Make purchasing through e-Banking   

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

81

Statistics Made purchasing through Banking in the last 12months N

Valid Missing

E100 0

Made purchasing through E-Banking in the last 12months Frequency Valid

Percent

Valid Percent

Cumulative Percent

None

34

34.0

34.0

34.0

one time

32

32.0

32.0

66.0

two to four times

14

14.0

14.0

80.0

five to seven times

10

10.0

10.0

90.0

6

6.0

6.0

96.0 100.0

eight to ten times over ten times Total

4

4.0

4.0

100

100.0

100.0

Made purchasing through e-Banking in the last 12months  34 respondents response is none. 32respondents purchased one time in year.  Only few of respondents purchased many times through e-Banking because they prefer manual banking more than e-Banking.  From the above graph 50% of s do not make purchases through e-Banking.

82

Statistics

Statement N

Valid Missin g

Demat Bills Statement Payment

Funds Transfer

Check Book

TDS Enquiry

Other Value Added Services

100

100

100

100

100

100

100

0

0

0

0

0

0

0

Frequency Table Statement Frequency Valid

Percent

Valid Percent

Cumulative Percent

Neutral

25

25.0

25.0

25.0

Good

16

16.0

16.0

41.0

Excellent

16

16.0

16.0

57.0

Poor

16

16.0

16.0

73.0

N/A

27

27.0

27.0

100.0

Total

100

100.0

100.0

Funds Transfer Frequency Valid

Percent

Valid Percent

Cumulative Percent

Neutral

20

20.0

20.0

20.0

Good

40

40.0

40.0

60.0

Excellent

24

24.0

24.0

84.0

Poor

5

5.0

5.0

89.0

N/A

11

11.0

11.0

100.0

100

100.0

100.0

Total

Demat Statement Frequency Valid

Percent

Valid Percent

Cumulative Percent

Neutral

13

13.0

13.0

13.0

Good

31

31.0

31.0

44.0

Exellent

17

17.0

17.0

61.0

N/A

39

39.0

39.0

100.0

Total

100

100.0

100.0

83

Bills Payment Frequency Valid

Percent

Valid Percent

Cumulative Percent

Neutral

16

16.0

16.0

16.0

Good

23

23.0

23.0

39.0

Excellent

30

30.0

30.0

69.0

Poor

6

6.0

6.0

75.0

N/A

25

25.0

25.0

100.0

Total

100

100.0

100.0

Cheque Book Frequency Valid

Percent

Valid Percent

Cumulative Percent

Neutral

20

20.0

20.0

20.0

Good

41

41.0

41.0

61.0

Excellent

12

12.0

12.0

73.0

Poor

7

7.0

7.0

80.0

N/A

20

20.0

20.0

100.0

Total

100

100.0

100.0

TDS Enquiry Frequency Valid

Percent

Valid Percent

Cumulative Percent

Neutral

32

32.0

32.0

32.0

Good

31

31.0

31.0

63.0

6

6.0

6.0

69.0

Excellent Poor

6

6.0

6.0

75.0

N/A

25

25.0

25.0

100.0

Total

100

100.0

100.0

Other Value Added Services Frequency Valid

Percent

Valid Percent

Cumulative Percent

Good

33

33.0

33.0

33.0

Excellent

20

20.0

20.0

53.0

Poor

4

4.0

4.0

57.0

N/A

43

43.0

43.0

100.0

Total

100

100.0

100.0

84

Bar Chart



Out of 100 respondents, 27 responded as N/A & 25 for neutral, remaining responded 16 for each.



40 respondents responsed funds transfer is good and 24 were excellent here we can come to know that more number of respondents likes this service.

85

 



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

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

86



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



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

87



Overall, Banking N

43 were responded other value added services are not applicable.

Statistics satisfied with Valid

SBI

E100

Missing

0

Overall, satisfied with SBI E-Banking Frequency Valid

Very Satisfied

Percent

Valid Percent

Cumulative Percent

18

18.0

18.0

18.0

9

9.0

9.0

27.0

Satisfied

59

59.0

59.0

86.0

Neutral

14

14.0

14.0

100.0

100

100.0

100.0

Unsatisfied

Total

88

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

Statistics Better rate and lower service charges N

Valid Missing

24 Hrs Access

Privacy is maintained

Innovative Services

Security of transaction

Quick Services

100

100

100

100

100

100

0

0

0

0

0

0

Frequency Table Better rate and lower service charges Frequency Valid

Percent

Valid Percent

Cumulative Percent

Not Important

22

22.0

22.0

22.0

Very Important

46

46.0

46.0

68.0

Less Important

32

32.0

32.0

100.0

100

100.0

100.0

Total

89

24 Hrs Access Frequency Valid

Percent

Valid Percent

Cumulative Percent

Not Important

15

15.0

15.0

15.0

Very Important

51

51.0

51.0

66.0

Less Important

34

34.0

34.0

100.0

100

100.0

100.0

Total

Privacy is maintained Frequency Valid

Percent

Valid Percent

Cumulative Percent

Not Important

15

15.0

15.0

15.0

Very Important

63

63.0

63.0

78.0

Less Important

22

22.0

22.0

100.0

100

100.0

100.0

Total

Innovative Services Frequency Valid

Percent

Valid Percent

Cumulative Percent

Not Important

9

9.0

9.0

Very Important

47

47.0

47.0

56.0

Less Important

44

44.0

44.0

100.0

100

100.0

100.0

Total

9.0

Security of transaction Frequency Valid

Percent

Valid Percent

Cumulative Percent

Not Important

13

13.0

13.0

13.0

Very Important

81

81.0

81.0

94.0

Less Important

6

6.0

6.0

100.0

100

100.0

100.0

Total

Quick Services Frequency Valid

Percent

Valid Percent

Cumulative Percent

Not Important

15

15.0

15.0

15.0

Very Important

62

62.0

62.0

77.0

Less Important

23

23.0

23.0

100.0

100

100.0

100.0

Total

FACTS AND FINDINGS

90

Facts of the study  Maximum number of customers came to know about e-

Banking services from their

friends.  More number of respondents felt e-Banking services as a necessity for their busy life and the reasons behind choosing e-Banking was- its convenience & 24/7 access. The other reason was that it saves their time.  More number of respondents felt internet Banking services as more friendly than other services.  Only few customers used electronic services for e-Shopping and remaining customers preferred traditional system.  Overall, customers felt satisfied with SBI e-Banking services.  Most of the customers used ATM services 2 to 5 times in a month.

Findings of the study

91

►

Majority of the customers are satisfied with State Bankof India.

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

►

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

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

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

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

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

►

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

►

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

extent. ►

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

►

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

loans.

CONCLUSIONS 92

 Skilled employees are less with reference to electronic banking than manual banking.  Decision making will be in the hands of top management only.  The Bank is serving customers with fully automated system.  The number of Electronic banking s is rapidly increasing.

RECOMMENDATION AND SUGGESTIONS 93

 Provide more training to the employees and customers about the handling of the electronic banking procedures.  Reduce the complex procedures in the electronic Banking.  Quick response to customers should be given while providing services through customer care services.  Technology & Security related issues should be handled very carefully to retain customers.

APPENDIX 94

Dear Sir/ Madam, I am Mr. Fahad Mohammad Hussain, a final year MBA student of SDCMS, I am conducting a survey on “Services provided by SBI through E-Banking with reference to SBI branches in MUZAFFARNAGAR city”. Please provide relevant information by filling this questionnaire to make my survey more comprehensive. All details given by you will be kept confidential. QUESTIONNAIRE ON “SATISFACTION FROM E – BANKING SERVICES. A COMPLETE STUDY OF STATE BANK OF INDIA. Personal details: NAME: AGE: OCCUPATION: E-MAIL ID : MOB. NO. : ADDRESS:

………………………………….. .………………………………….. …………………………………... …………………………………… ………………………………….. ………………………………….. …………………………………..

1) Do you do E-Banking? YES

NO

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

Family

Relatives

Bank officials

ment 3) Do you feel E-Banking services are necessary? YES NO Reason …………………………………………………………….. ……………………………………………………………………... 4) What are the reasons for choosing SBI E-Banking services? Please select all that apply 95

Convenience

24Hour access to s

To save time

other’s

5) Which of the following services you think, are more friendly? Internet Banking:

ATM Services:

Telephone Banking: 6) How often do you use SBI online services? Daily Weekly

Monthly Never

7) Which online products& Services do you use regularly? Please select all that apply E-Ticketing Cheque Book Request Statement Transaction Enquiry Demat Statement 8)Do

you

Yes

make

Demand Draft SBI E-Tax E-Payment Third Party Transfer

purchasing

through

E-Banking?

No

9) Approximately how many times you have made purchasing through E-Banking in the last 12 months? 1 time 5 to 7 times Over 10 times

2 to 4 times 8 to 10 times

10) Please rate the following online Features of SBI +2 +1 0 -1 Excellent Good Neutral Poor Statement Funds Transfer Demat statement Bill Payment 96

-2 N/A

Cheque book request TDS Enquiry Other Value Added services 11) Overall, how satisfied you are with SBI E-banking? Very satisfied

Unsatisfied

Satisfied

Very unsatisfied

Neutral 12) For your choice of E- banking, which of the following factors do you feel important? -1 0 +1 Less Not Very Important Important Important Better rate and lower service charge 24 hours access Privacy is maintained Innovative services Security of Transaction Quick service 13) Do you still visit the bank since after having started using SBI E- banking? YES

NO

If ‘YES’ why? ………………………………………………………………………………………………… …………………………………………………………………………… 14) What is the main reason to visit your bank branch? (Please choose the single most important reason)

15)

To make deposit To get advice for investment options To inquire about balance To withdraw cash Other How frequently do you use an Automated Teller Machine (ATM) per month? 1 time only

2 to 5 times

97

6 to 8 times

9 to 12 times

Over 12 times

BIBLIOGRAPHY

Books :

SBI Training guide for internet banking

Websites:

www.statebankofindia.com



www.onlinesbi.com



www.weikipedia.com



www.google.com

98