ResEarCh RePOrt: March 2012

USES OF INTERNET BANKING SERVICES PROVIDED BY PUBLIC SECTOR BANK WITH SPECIFIC REFRENCE OF SBI

Executive Summary

Internet banking-Internet banking is changing the banking industry and is having the major effects on banking relationships. Banking is now no longer confined to the branches were one has to approach the branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In true Internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service. The net banking, thus, now is more of a norm rather than an exception in many developed countries due to the fact that it is the cheapest way of providing banking services.

E-banking is defined as the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet. Customers access e-banking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are similar for the various e-banking access channels, this booklet focuses specifically on Internet-based services due to the Internet’s widely accessible public network. Accordingly, this booklet begins with a discussion of the two primary types of Internet websites: informational and transactional

State Bank of India is India’s largest bank with a branch network of over 11000 branches and 6 associate banks located even in the remotest parts of India. State Bank of India (SBI) offers a wide range of banking products and services to corporate and retail customers.

E-banking the execution of financial services via internet,reducing cost and increase in convenience for the customer to access the transaction. e- Banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution. The following terms all refer to one form or another of electronic banking: personal computer (PC) banking, Internet banking, virtual banking, online banking, home banking, remote electronic banking, and phone banking. PC banking and Internet or online banking are the most frequently used designations. It should be noted, however, that the terms used to describe the various types of electronic banking are often used interchangeably.

The ever increasing speed of internet enabled phones & personal assistant, made the transformation of banking application to mobile devices, this creative a new subset of electronic banking i.e. mobile banking. In 1999 & 2000 mobile banking as an established channels, still seems to be a distant prospect.

The internet is revolutionizing the way the financial industry conducts business online, has created new players who offer personalize services through the web portals. This increase to find new ways and increase customer loyalty to add the value to this product and services.

Banks also enables customers lifestyle needs by changing and increasing preference for speed and convenience are eroding the traditional affinity between customer and branch offices as a new technology disinter mediates traditional channels, delivering the value proposition hinges on owing or earning the customer interface and bringing the customer a complete solution which satisfies their needs. Smart card is a new trend which provides the opportunity to build an incremental revenue stream by providing an ideal platform for extended application and services. Banks are well positioned to play central role unit in future M-commerce market. Banks have strong relationships with corporate and business customers and a wide experience in providing them with corporate banking services. Bank provides a multimedia of small and large retailers with acquiring functionality in credit card transactions. Customers have trusted relationships with banks and a lower propensity to switch banking providers.

INTRODUCTION OF INTERNET BANKING

Traditional banks offer many services to their customers, including accepting customer money deposits, providing various banking services to customers, and making loans to individuals and companies. Compared with traditional channels of offering banking services through physical branches, e-banking uses the Internet to deliver traditional banking services to their customers, such as opening accounts, transferring funds, and electronic bill payment.

E-banking can be offered in two main ways. First, an existing bank with physical offices can also establish an online site and offer e-banking services to its customers in addition to the regular channel. For example, Citibank is a leader in e-banking, offering walk-in, face-to-face banking at its branches throughout many parts of the world as well as e-banking services through the World Wide Web. Citibank customers can access their bank accounts through the Internet, and in addition to the core e-banking services such as account balance inquiry, funds transfer, and electronic bill payment, Citibank also provides premium services including financial calculators, online stock quotes, brokerage services, and insurance.

E-banking from banks like Citibank complements those banks' physical presence. Generally, e-banking is provided without extra cost to customers. Customers are attracted by the convenience of e-banking through the Internet, and in turn, banks can operate more efficiently when customers perform transactions by themselves rather than going to a branch and dealing with a branch representative.

E-banking services are delivered to customers through the Internet and the web using Hypertext Markup Language (HTML). In order to use e-banking services, customers need Internet access and web browser software. Multimedia information in HTML format from online banks can be displayed in web browsers. The heart of the e-banking application is the computer system, which includes web servers, database management systems, and web application programs that can generate dynamic HTML pages.

One of the main concerns of e-banking is security. Without great confidence in security, customers are unwilling to use a public network, such as the Internet, to view their financial information online and conduct financial transactions. Some of the security threats include invasion of individuals' privacy and theft of confidential information. Banks with e-banking service offer several methods to ensure a high level of security: (1) identification and authentication, (2) encryption, and (3) firewalls. First, the identification of an online bank takes the form of a known Uniform Resource Locator (URL) or Internet address, while a customer is generally identified by his or her login ID and password to ensure only authenticated customers can access their accounts. Second, messages between customers and online banks are all encrypted so that a hacker cannot view the message even if the message is intercepted over the Internet. The particular encryption standard adopted by most browsers is called Secure Socket Layer (SSL). It is built in the web browser program and users do not have to take any extra steps to set up the program. Third, banks have built firewalls, which are software or hardware barriers between the corporate network and the external Internet, to protect the servers and bank databases from outside intruders. For example, Wells Fargo Bank connected to the Internet only after it had installed a firewall and made sure the firewall was sufficiently impenetrable.

On October 1, 2000, the electronic signatures bill took effect, recognizing documents signed online as legal. Some banks plan to begin using electronic checks as soon as they can work out various security measures.

On October 1, 2000, the electronic signatures bill took effect, recognizing documents signed online as legal. Some banks plan to begin usin electronic checks as soon as they can work out various security measures.

The range of e-banking services is likely to increase in the future. Some banks plan to introduce electronic money and electronic checks. Electronic money can be stored in computers or smart cards and consumers can use the electronic money to purchase small value items over the Internet. Electronic checks will look similar to paper checks, but they can be sent from buyers to sellers over the Internet, electronically endorsed by the seller, and forwarded to the seller's bank for electronic collection from the buyer's bank. Further, banks seek to offer their customers more products and services such as insurance, mortgage, etc.

Types of E-Banking

The common assumption is that Internet banking is the only method of on-line banking. However, this is not strictly the case, as several types of service are currently available:

PC Banking - The forerunner to Internet banking has been around since the late 1980's and is still widely used today. Individual banks provide software which is loaded on to an SME's office computer. The SME can then access their bank account via a modem and telephone link to the bank. Access is not necessarily via the Internet.
Internet Banking - Using a Web browser, a user can access their account, once the bank's application server has validated the user's identity.
Digital TV Banking- Using the standard digital reception equipment (set top box and remote control), users can access their bank account. Abbey National and HSBC services are available via Digital TV providers. One of its main selling points is that no account details are transmitted via the World Wide Web;
Text Phone Banking - HSBC have introduced this service to allow customers with text phones to check their balance, pay bills and transfer money.

Internet banking can be split into two distinct groups:

Traditional banks and building societies use the Internet as an add-on service with which to give businesses access to their accounts.
New Internet-only banks have no bricks and mortar presence on the High Street. Therefore, they have lower overheads and can offer higher rates of interest and lower charges.

FEATUERS OF E-BANKING

Ø E-Banking provide exceptional rates on Savings, CDs, and IRAs

Ø Checking with no monthly fee, free bill payment and rebates on ATM surcharges

Ø credit cards with low rates

Ø Easy online applications for all accounts, including personal loans and mortgages

Ø 24 hour account access

Ø It provides Quality customer service with personal attention

Ø It provides the quick services to their customers.

Ø Enables transfer of funds from one place to another(banks).

Ø Exchange of statisticals information amongs banks.

Ø Enables foreign exchange operations.

Ø Inter-bank applications like settlement of funds between banks.

Ø Provides facilities like demat operation,ATM operation,online banking.

BENEFITS OF E-BANKING

For Banks:

Price- In the long run a bank can save on money by not paying for tellers or for managing branches. Plus, it's cheaper to make transactions over the Internet.Customer Base- The Internet allows banks to reach a whole new market- and a well off one too, because there are no geographic boundaries with the Internet. The Internet also provides a level playing field for small banks who want to add to their customer base. Efficiency- Banks can become more efficient than they already are by providing Internet access for their customers. The Internet provides the bank with an almost paper less system.

Customer Service and Satisfaction- Banking on the Internet not only allow the customer to have a full range of services available to them but it also allows them some services not offered at any of the branches. The person does not have to go to a branch where that service may or may not be offer. A person can print of information, forms, and applications via the Internet and be able to search for information efficiently instead of waiting in line and asking a teller. With more better and faster options a bank will surly be able to create better customer relations and satisfaction.

Image- A bank seems more state of the art to a customer if they offer Internet access. A person may not want to use Internet banking but having the service available gives a person the feeling that their bank is on the cutting image.

For Customers:

Bill Pay: Bill Pay is a service offered through Internet banking that allows the customer to set up bill payments to just about anyone. Customer can select the person or company whom he wants to make a payment and Bill Pay will withdraw the money from his account and send the payee a paper check or an electronic payment

Other Important Facilities: E- banking gives customer the control over nearly every aspect of managing his bank accounts. Besides the Customers can, Buy and Sell Securities, Check Stock Market Information, Check Currency Rates, Check Balances, See which checks are cleared, Transfer Money, View Transaction History and avoid going to an actual bank. The best benefit is that Internet banking is free. At many banks the customer doesn't have to maintain a required minimum balance. The second big benefit is better interest rates for the customer.

Internet Banking

Internet banking, sometimes called online banking, is an outgrowth of PC banking. Internet banking uses the Internet as the delivery channel by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and savings account balances, paying mortgages, and purchasing financial instruments and certificates of deposit. An Internet banking customer accesses his or her accounts from a browser— software that runs Internet banking programs resident on the bank’s World Wide Web server, not on the user’s PC. Net Banker defines a “ true Internet bank” as one that provides account balances and some transactional capabilities to retail customers over the World Wide Web. Internet banks are also known as virtual, cyber, net, interactive, or web banks. his is basically the banking industry's attempt to jump on the "e-business" band wagon. E-banking is a term that attempts to broadly describe today's alternate delivery channels. Different banks - and vendors - will describe this differently.

Rather than spending too much time on the term, I'd suggest you open a dialogue with your customers about the types of services they are interested in, and begin to prioritize your investment in these new services. Ideas would include image delivery via Internet, Internet Commercial cash management, and on-line bill pay.

MAIN CONCERNS IN INTERNET BANKING

In a survey conducted by the Online Banking Association, member institutions rated security as the most important issue of online banking. There is a dual requirement to protect customers' privacy and protect against fraud. Banking Securely: Online Banking via the World Wide Web provides an overview of Internet commerce and how one company handles secure banking for its financial institution clients and their customers. Some basic information on the transmission of confidential data is presented in Security and Encryption on the Web. PC Magazine Online also offers a primer: How Encryption Works. A multi-layered security architecture comprising firewalls, filtering routers, encryption and digital certification ensures that your account information is protected from unauthorized access.

Internet Banking in India

The Internet banking is changing the banking industry and is having the major effects on banking relationships. Even the Morgan Stanley Dean Witter Internet research emphasized that Web is more important for retail financial services than for many other industries. Internet banking involves use of Internet for delivery of banking products & services. It falls into four main categories, from Level 1 - minimum functionality sites that offer only access to deposit account data - to Level 4 sites - highly sophisticated offerings enabling integrated sales of additional products and access to other financial services- such as investment and insurance.

DRIVERS OF CHANGE

Advantages previously held by large financial institutions have shrunk considerably. The Internet has leveled the playing field and afforded open access to customers in the global marketplace. Internet banking is a cost-effective delivery channel for financial institutions. Consumers are embracing the many benefits of Internet banking. Access to one's accounts at anytime and from any location via the World Wide Web is a convenience unknown a short time ago. The six primary drivers of Internet banking includes, in order of primacy are:

Ø Improve customer access

Ø Facilitate the offering of more services

Ø Increase customer loyalty

Ø Attract new customers

Ø Provide services offered by competitors

Ø Reduce customer attrition

The banking industry in India is facing unprecedented competition from non-traditional banking institutions, which now offer banking and financial services over the Internet. The deregulation of the banking industry coupled with the emergence of new technologies, are enabling new competitors to enter the financial services market quickly and efficiently.

Features of Internet banking

The features available from an on-line bank account are similar to those which are available via 'phone banking or visiting the local branch. On-line banking features do differ between the banks, but usually include:

Ø Transfer of funds between accounts;

Ø It brings efficiency in CRM(Customer relationship management)

Ø Make Payment of bills

Ø Introduces new & innovative products &services

Ø View balance and statements;

Ø Brings door to door services

Ø Create, view and maintain Standing Orders

Ø Have evolutionary trend at a globle scenario.

Advantages of Internet Banking

Ø Opening & closing of accountes

Ø Make the payments of merchandise transaction through Debit & Credit cards.

Ø It gives reliefs to their customer from carrying heavy cash.

Ø Enables prompt & speedy operation to clients.

Ø It saves lot of time to their customers &convenient to access.

Disadvantages of Internet Banking

Ø Customer may have to face risky transaction & fraud.

Ø Failure of power supply cause to break down of system.

Ø Loss of heavy income at times of settlement of higher magnitude.

Ø Cost involved in trainning staff may not be profitable specially in times of attrition.

Ø Development of an attitude of lethargy.

Mobile banking use cases

A mobile user has to be seen from his context when using the application. Needs and expectations are not generic, but bound to this context.

As a typical mobile banking user, we consider someone who already is an electronic banking user shows significant affinity to technology and often finds himself in situations where he can not (or does not want to) rely an infrastructure necessary for electronic banking.

In the following, we introduce four use cases. These have been developed in the course of two group discussions; each group consisted of mobile banking users and mobile commerce experts. The groups focused on identifying real-life situations in which the use of mobile banking provides an informational added value. The resulting situations have been aggregated to the use cases The use cases are not exhaustive, but representative: Each case stands for a series of cases, which are similar in the depth of the desired information and/or the conditions of the usage. For each use case we identify the most important, concrete need that the user has in this particular situation.

Use case 1: Request of account balance.

The user is in a mobile situation (e.g. in a department store) and intends to know his account balance, e.g. to verify his account before realizing a spontaneous purchase. Resulting need: Quick obtainment of account balance.

Use case 2: Control of account movements.

The user is waiting for an important cash receipt on his account. He intends to have the exact details of the cash receipt. Resulting need: Continuous control over movements on the account.

Use case 3: Instant payment.

The user is in a mobile situation and intends to make a payment by bank transfer from his account. Resulting need: Instant execution of a bank transfer.

Use case 4: Administration of the account.

The user intends to use spare time (e.g. using a train or waiting on the airport) to administrate his account. Resulting need: Quick and easy-to-use execution of transactions and administration is possible.

Business models and new ways to interact with customers. The ability to perform banking transactions online has created new players in the financial industry, such as online banks and brokers who offer personalized services through their Web portals. This increased competition is driving traditional financial institutions to find new ways to add the value to their products and services, gain competitive advantage and increase customer loyalty while also attracting new, high-value clients.

Mobile and wireless technology, combined with the wide variety of portable devices available today, enables new revenue opportunities for financial services organizations. This provides a new channel that can be used to refresh and expand the customer base, attract prime customers and enhance loyalty. With mobile and wireless technology, banks can offer a wide possibilities of services to their customers, from the freedom of paying bills while stuck in traffic, to receiving notification of a change in stock price while having lunch, the convenience and time saving benefits of wireless financial services are huge. The challenge, then, is how to turn these possibilities into a reality for the customers.

Benefits	Description
Grow new customer base and markets	Developing wireless applications and services targeted at the mobile mass market will allow attracting new, high-value customers into mobile banking portal and expanding the reach to global markets.

Increase share of customer wallet	The convenience of having personalized wireless access to critical financial information is an invaluable service for customers on the move. Enabling the execution of time-sensitive financial transactions anywhere, anytime, provides the opportunity to strengthen the relationships with existing customers. This ultimately results in an increased share of the customers' transactions--preventing them from taking a portion of their financial business elsewhere.
Grow assets, number of transactions and fees	Granting customers flexible access to financial information and accounts enables them to perform transactions when it's most convenient for them. As a result, they have the opportunity to conduct transactions more frequently, driving increased revenue from fees.
Expand and enhance brand presence	Brand and reputation for convenience, service and innovation will be strengthened and enhanced each time customers on the move stop to check their stock portfolio or to pay bills wirelessly. This also offers significant potential to grow the market awareness through word-of-mouth.

General conditions of mobile banking

Electronic banking is one of the most successful business- to-consumer applications in electronic commerce (EC).

Banks greatly support this not only because they could meet their customers’ need for convenience but also because of the enormous economic impacts in replacing a high-cost channel (bank clerks) through a low-cost channel (a central web server) for simple transactions, with the additional benefit of eliminating the necessity for a media conversion.

Since users considered their mobile phone as a personal trusted device making it to an integral part of their lives and more and more of these devices became Internet- enabled, the regular conclusion was the transformation of banking applications to mobile devices as the next step of electronic banking development.

For mobile banking, the advantages even go much further than for electronic banking: The high penetration of mobile phones reaches all social levels; mobile applications disband the limitations of electronic banking as they allow for a use anytime-anywhere and the subjective and objective security of the device is higher than that of a personal computer. Despite all of this, more than four years after the start of the first mobile banking applications customers simply do not use them and utilization figures stay very far behind all expectations (e.g. [1]). Mobile banking as an established channel still seems to be a distant prospect.

The reasons for this great disappointment are to be analyzed. Doing so in the following sections, we do not intend to start with current applications (which could mean biased) but from scratch, with an analysis of the customer requirements to such applications.

Customer requirements for mobile banking applications Set of customer requirements

Technical requirements

Usage is possible with both kinds of devices
Adaptation to device
Usage regardless of network operator
Small amount of transmitted data

Usability requirements

Possibility to work offline
Simple data input method
Resumption of usage at the same point
One-Click-Request

Design requirements

Possibility to personalize the application
Possibility to scale the application
Announcement of events
Wide range of functionality

Security requirements

Encrypted data transmission
Authorization of access
Simple Authorization

General considerations

A mobile banking application is, first of all, a mobile application. To conceptualize a mobile application, additional informational added values have to be targeted, using mobile added values [14]. In other words, it is far from sufficiency to just porting an existing Internet application on a mobile device. Mobile applications have to be specifically made-to-measure on the one hand side to the needs and expectations of the mobile user and on the other hand side to the specific restrictions of mobile communication techniques and mobile devices. In order to derive a set of requirements to mobile banking applications we pursue two steps: Firstly we identify general characteristics of the mobile use which are relevant. Secondly we closely watch the user and his context when wanting to use mobile banking.

Characteristics of the mobile use

The use of mobile applications underlies several specific restrictions. We consider five characteristics of the mobile use to be particularly relevant as they greatly influence the design of mobile banking applications and the suitability of certain technical solutions. A mobile application is used via a mobile device. For these devices (currently either a mobile phone or a PDA), special limitations are valid .For the mobile banking context, above all, these are the limited input and display capabilities. The connection is provided by a mobile network operator (MNO). This is especially important if applications need to access certain parts of the infrastructure which are under control of the MNO (e.g. the SIM card). In the case of negotiations, these have to be pursued with all MNO on the designated market. The use of mobile data transmission is expensive. In the case of circuit-switched data transmission.

Sensitive data is transmitted. This implicates the use of adequate security measures. A disruption of the usage is possible at any time. This is principally already true for electronic banking as well (the connection may e.g. be disrupted by a breakdown of the transmission or of the operating system of the client Computer) and provides a special necessity to avoid incomplete transactions. For mobile banking, it is extremely more probable as a mobile usage causes a continuous change of conditions, e.g. through geographical influences or cell-handover. Thus, it is also important for the usability of a service: It is not acceptable for a user if he almost completed a transaction and his train enters a tunnel that he has to wait until the end of the tunnel and restart his transaction from the beginning (hoping the next tunnel is far away enough). It is important that the named restrictions have to be considered as early as possible, which means in the phase of conceptualization.

Mobile Banking: No wires, No worries, New Customers

Mobile communication devices are revolutionizing banking transactions over wireless network and the Internet. To attract and retain customers, bank need to exchange their full range of services across a wide range of Mobile, wireless devices without having an impact on their current infrastructure and the delivery channels it currently supports. Wireless Networks, Mobile Gateways, Wireless Application Protocol (WAP) & Wireless Markup Language (WML) all play an important role in bringing mobile banking strategy to the market.

In addition to established traditional channels, including branch banking and ATM banking, most major banks in today market now offers e-banking as an extension to their existing array of services & conveniences of wired consumers & businesses, the next phase in the revolution is wireless-mobile-banking that is available anytime anywhere from ‘always-on’ mobile devices like mobile phones and personal digital assistant (PDA). With the proliferation & cost effectiveness of mobile delivery channel, banks have a built-in delivery mechanism that can offer services & 24×7 access regardless of where the customer happens to be. Unlike PC-Based e-banking, m-banking provides banks with the unprecedented opportunity to reach their customers in an unrestricted environment. The big benefits for banks? Higher customer satisfaction & loyalty, no transaction-based fee revenue, lower cost of ownership and integrated customer relationship management channel.

Mobile banking applications

Examined applications

In the following, the main types of existing mobile banking applications are introduced. These build standard types as each of them is representative for a series of comparable applications. While WAP-banking and mobile banking via PDA are generic, SMS-banking and mobile banking with SIM Toolkit use specialties of the GSM standard.

WAP-banking

The most widespread solution for mobile banking is based on micro-websites following the WAP standard (Wireless Application Protocol). The function of WAP banking is in many ways similar to the function of Electronic banking using http. The client sends a request and gets a response with page content which is stored on or dynamically generated by a standard web server. The main difference is in the usage of a WAP gateway for the conversion of the protocols. At banks must be considered that very sensitive data is processed. While a normal content provider doesn’t has to observe special security precautions, and in some cases can even use the services of extern providers, has to secure its web server and WAP Gateway especially against unauthorized access. This is especially necessary because of the fact that inside the WAP Gateway the encryption protocol is converted from SSL/TLS to WTLS with the effect that data is not encrypted while it is processed. While authentication is assured via a PIN (personal identification number) of the user, authorization for transactions is realized via transaction numbers (TAN). This concept, known from the electronic banking, forces the user to carry a TAN list with him in order to make transactions.

SMS-banking

The Short Message Service (SMS) is a GSM service to exchange text messages up to 140 byte (or 160 characters of 7 bit). The transmission of mobile-originated short messages is carried out by the short message service center (SMSC) of the particular network operator. The SMSC is receiving the message from the mobile device and routing it to the destination device. For generating mobile-terminated short messages, it is possible that a company or a special service provider runs an own SMSC. Thus, a bank could generate SMS from bank data like account balance or account movements and send it to the mobile device of the customer. This technique is used at SMS-banking: The customer sends an SMS with a request to the bank, and gets the desired data as an answer.

The customer has to include a PIN for authorization in every SMS he sends to his bank. Alike the WAP banking, one should pay special attention on the security of the location of the SMSC. The operation of SMSC is offered as a service by many service providers. The usage of such a service is out of question for banks, because of the high sensitive character of the transmitted data. For this reason it is mandatory for banks to run their own SMS-Gateway and secure it from unauthorized access. The main problem with this kind of transmission is the missing encryption of the data during the on-the air transmission between the service center and the mobile phone. An encryption of pure text-SMS is not possible (unless an application on the mobile device would be able to decrypt the information). So the data is transmitted unencrypted. Because of this missing encryption, banks

MOBILE NETWORKS PROVIDE THE FOLLOWING COMPETITIVE ADVANTAGES

1. Always – on 24 ×7 access:

Mobile networks will provide the ability for consumers to be transaction- ready , much in the way cable access has facilitated online pc access and reduced consumer dial up delays 3555.

2. Advanced penetration of mobile networks:

2G (second generation) networks already cover more than 90 percent of the population in the western world, and this number is growing steadily.

3. Personalization:

Through SIM (Subscriber Identity Module) cards, mobile customers have a specific profile that enables customized functionality that directly reflects the way they want to transact business over mobile devices. Through the convenient addition of a multi-application relationship card, mobile customers will also have a built in platform for a host of other application services, including security keys, virtual credits cards, and other customized payment instruments.

4. Rapid evolution of global protocols such as WAP (wireless application protocol):

This enables the communication channel between computers and mobile devices. The WAP component essentially provides the facility for reformatting data for display on wireless handsets.

5. Faster Data Processing Speeds:

Increases in bandwidth and data transmission a speed makes mobile data services efficient and cost - effective in a real time environment.

6. Security:

Effectively, the mobile banking transaction can be protected by a private key stored on SIM card and hence mobile phone can become a wireless wallet to protect proprietary and financial information.

Dangers of E-Banking

Most services suffer from disadvantages, and on-line banking is no exception. Recently, there have been a number of technical incidents, where customer information was disclosed to other users. Banks have been quick to react, and have either reverted back to the previous system or have solved the problem immediately

The main disadvantages are those related to fear of the unknown. The main fear is that transferring money electronically will somehow cause it to disappear into the electronic abyss. Banks are aware of this concern and do assure account holders that such an event should not occur. There is some speculation, currently, that Internet-only banks will not be able to sustain their high interest rates.

Other drawbacks to using Internet-only banks include:

Penalties for phone transactions;
Access to cash (ensure that there is sufficient access to ATMs).

We may perceive this method of banking to be instantaneous. For example, when a bill is paid, the expectation is that the transaction is completed with immediate effect. However, this is not the case, as the systems are still connected to the UK clearing system, which takes three working days to clear payments., it appears that in many cases basic risk principles have been ignored in the rush. Banks could lose the whole e-trust business if they are unable to rise to the challenge of meeting customers' ever-rising demands in a secure trading environment. Use Dangers in E-banking to reduce the level of risks to a minimal level whilst ensuring that your business is not justify behind in the race to retain and win new electronic customers.

How can this report help you? - It identifies the major risks which have been encountered so far and pinpoints areas which are to become big risks for e-bankers in the future.

Security

One of the main concerns with on-line banking is that of security. Fraudulent and accidental security breaches are a rare occurrence. Banks employ many procedures and systems in order to prevent these incidents. As a result they invest a considerable amount of time and money in developing systems which will prevent fraud and unauthorized access. If a security breach is discovered, the bank is liable for all money stolen, and, as a result, insures them against the possibility.

The security used in on-line banking is a combination of technology and user authentication. The bank will use a 128 bit Secure Session Layer (SSL) encryption protocol, between its server and the user's browser. The user's browser will show a padlock when the session is secure. Using SSL can be thought of as preventing eavesdropping. If a hacker were to attempt to listen to the data transmission, they would have to guess the decryption key - which is a 1 in 3.4 x10 to the power of 38 chances, making it infinitely secure. From a technology point of view, on-line banking is secure.

The weakest link of on-line banking is user authentication. Typically, a user has to supply a set of answers to questions, which they have previously entered upon registration, as well as a username and password. The banks place the responsibility of keeping these answers secure with the user. If any are disclosed and money is stolen, the liability lies solely with the account holder, not the bank. With this in mind the following is sound advice to users:

Make sure the Web Address starts https:\\ rather than http:\\, this shows that the session is encrypted;
Look for the closed padlock in the browser;
Do not use simple or easily guessable passwords (use a combination of letters and numbers) and change it frequently;
Do not write down any username, password or any other information required;
Always empty the cache of the browser after banking;
Always sign-off when you are finished;
Do not leave the PC unattended while banking;
Do not use the "Auto Complete" feature within the browser;
Check the Terms and Conditions for any notes on where you can and cannot access the on-line accounts. (e.g. an Internet café is not as secure as your home PC);
Use additional software that your bank might recommend (firewall or anti-virus software)
Keep your Web browser up-to-date with the latest patches and versions;
Never send any account information in an email as this is insecure. Be wary of any e-Mail’s from your bank which ask you to send details via email, banks will not do this;
Also, be wary of emails from banks which ask you to log into a Web site and resubmit your details. These fake Web sites have been set-up by fraudsters. If you are unsure of an email play it safe and contact your bank to verify the email.

Application for Internet Banking, Phone Banking and Mobile Banking

(All fields with * are mandatory to be filled.)

Name of the applicant: Mr. /Ms. /Mrs. ___________________

Surname *

_____________________ _______________ First Name * Middle Name *

Mailing Address *________________________________________________________________________________________________________________

City *: ____________________ Pin Code:

Email Address *: ____________________ @_______________ Phone No. Mobile No. : ________________________

Mother's Maiden Name *:

Date of birth *: _______/ _______/ ______

dd mm yy

I) In case of joint accounts, the applicant is required to obtain the attached mandate from the joint account holder(s).

II) SBI Bank accountholders can access their bank accounts through SBI Bank Internet Banking only where the mode of operation of SBI Bank account is Single/Either or Survivor/Anyone or Survivor

Please tick one of the following:

Application for Internet Banking, Phone Banking and Mobile Banking

(All fields with * are mandatory to be filled.)

Name of the applicant: Mr. /Ms. /Mrs. ___________________

Surname *

_____________________ _______________ First Name * Middle Name *

Mailing Address *________________________________________________________________________________________________________________

City *: ____________________ Pin Code:

Email Address *: ____________________ @_______________ Phone No. Mobile No. : ________________________

Mother's Maiden Name *:

Date of birth *: _______/ _______/ ______

dd mm yy

I) In case of joint accounts, the applicant is required to obtain the attached mandate from the joint account holder(s).

II) SBI Bank accountholders can access their bank accounts through SBI Bank Internet Banking only where the mode of operation of SBI Bank account is Single/Either or Survivor/Anyone or Survivor.

INTRODUCTION BANKING SECTOR

History of Banking in India

Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.

He government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dials a pizza. Money has become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

• Early phase from 1786 to 1969 of Indian Banks

• Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
• New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.

Phase I

The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.

During those day’s public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership.

The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country

• 1949: Enactment of Banking Regulation Act.

• 1955: Nationalization of State Bank of India.

• 1959: Nationalization of SBI subsidiaries.

• 1961: Insurance cover extended to deposits.

• 1969: Nationalization of 14 major banks.

• 1971: Creation of credit guarantee corporation.

• 1975: Creation of regional rural banks.

• 1980: Nationalization of seven banks with deposits over 200 core.

After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

BANKING STRUCTURE

Nationalization of Banks in India

The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and even managed by them.

• Central Bank of India

• Bank of Maharashtra

• Dena Bank

• Punjab National Bank

• Syndicate Bank

• Canara Bank

• Indian Bank

• Indian Overseas Bank

• Bank of Baroda

• Union Bank

• Allahabad Bank

• United Bank of India

• UCO Bank

• Bank of India

Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of Seven State Banks of India (formed subsidiary) took place on 19th July, 1960.The State Bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches and it offers either directly or through subsidiaries -- a wide range of banking services.

The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200 cores.Till this year, approximately 80% of the banking segment in India was under Government ownership.

After the nationalization of banks in India, the branches of the public sector banks rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

• 1955: Nationalization of State Bank of India.

• 1959: Nationalization of SBI subsidiaries.

• 1969: Nationalization of 14 major banks.

• 1980: Nationalization of seven banks with deposits over 200 cores

Scheduled Commercial Banks in India

The commercial banking structure in India consists of:

• Scheduled Commercial Banks in India

• Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918 branches. The scheduled commercial banks in India comprise of State bank of India and its associates (nationalized banks (19), foreign banks (45), private sector banks (32), co-operative banks and regional rural banks.

"Scheduled banks in India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank".

"Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

The following are the Scheduled Banks in India (Public Sector):

• State Bank of India

• State Bank of Bikaner and Jaipur

• State Bank of Hyderabad

• State Bank of Indore

• State Bank of Mysore

• State Bank of Patiala

• State Bank of Saurashtra

• State Bank of Travancore

• Andhra Bank

• Allahabad Bank

• Bank of Baroda

• Bank of India

• Bank of Maharashtra

• Canara Bank

• Central Bank of India

• Corporation Bank

• Dena Bank

• Indian Overseas Bank

• Indian Bank

• Oriental Bank of Commerce

• Punjab National Bank

• Punjab and Sind Bank

• Syndicate Bank

• Union Bank of India

• United Bank of India

• UCO Bank

• Vijaya Bank

The following are the Scheduled Banks in India (Private Sector):

• Vysya Bank Ltd

• SBBJBank Ltd

• Indusind Bank Ltd

• ICICI Banking Corporation Bank Ltd

• Global Trust Bank Ltd

• HDFC Bank Ltd

• Centurion Bank Ltd

• Bank of Punjab Ltd

• IDBI Bank Ltd

The following are the Scheduled Foreign Banks in India:

• American Express Bank Ltd.

• ANZ Gridlays Bank Plc.

• Bank of America NT & SA

• Bank of Tokyo Ltd.

• Banquc Nationale de Paris

• Barclays Bank Plc

• Citi Bank N.C.

• Deutsche Bank A.G.

• Hongkong and Shanghai Banking Corporation

• Standard Chartered Bank.

• The Chase Manhattan Bank Ltd.

• Dresdner Bank AG.

NEW GENERATION BANKING

The liberalize policy of Government of India permitted entry to private sector in the banking, the industry has witnessed the entry of nine new generation private banks. The major differentiating parameter that distinguishes these banks from all the other banks in the Indian banking is the level of service that is offered to the customer. Verify the focus has always been centered around the customer – understanding his needs, preempting him and consequently delighting him with various configuration of benefits and a wide portfolio of products and services. These banks have generally been established by promoters of repute or by ‘high value’ domestic financial institutions. The popularity of these banks can be gauged by the fact that in a short span of time, these banks have gained considerable customer confidence and consequently have shown impressive growth rates. Today, the private banks corner almost four per cent share of the total share of deposits. Most of the banks in this category are concentrated in the high-growth urban areas in metros (that account for approximately 70% of the total banking business ) With efficiency being the major focus, these banks have leveraged on their strengths and competencies viz. Management, operational efficiency and flexibility, superior product positioning and higher employee productivity skills.

The private banks with their focused business and service portfolio have a reputation of being niche players in the industry. A strategy that has allowed these banks to concentrate on few reliable high net worth companies and individuals rather than cater to the mass market. These well-chalked out integrates strategy plans have allowed most of these banks to deliver superlative levels of personalized services. With the Reserve Bank of India allowing these banks to operate 70% of their businesses in urban areas, this statutory requirement has translated into lower deposit mobilization costs and higher margins relative to public sector banks.

INTRODUCTION TO THE ORGANISATION

Spreading its arms around the world, the SBI’s International Banking Group delivers the full range of cross-border finance solutions through its four wings the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division.

The Domestic wing provides services like merchant banking, shipping finance and project export finance. The Foreign Offices wing offers the entire range of international trade and industrial finance products, while the Kolkatta-based Foreign Department undertakes treasury and currency operations.

The International Services division renders specialized services like correspondent banking, global link services and country and bank risk exposure monitoring. Being India’s largest and most trusted commercial bank, the SBI offers you a network of relationships unmatched in strength and span by any other Indian financial entity.

The bank has a network of 66 offices/branches in 29 countries spanning all time zones. The SBI’s international presence is supplemented by a group of Overseas and NRI branches in India and correspondent links with over 522 leading banks of the world. SBI’s offshore joint ventures and subsidiaries enhance its global stature.

The bank has carved a niche for itself in Euro land with branches strategically located in Paris, Frankfurt and Antwerp. Indian banks and corporate are able to avail single-window Euro services from SBI Frankfurt.

These strengths are reinforced by a dedicated and highly skilled team of professionals deployed by the bank in each specific segment. The Bank is actively involved since 1973 in non-profit activity called Community Services Banking.

All our branches and administrative offices throughout the country sponsor and participate in large number of welfare activities and social causes. Our business is more than banking because we touch the lives of people anywhere in many ways.

INVESTOR RELATIONS:

State Bank of India, the country’s largest commercial Bank in terms of profits, assets, deposits, branches and employees, welcomes you to its ‘Investors Relations’ Section. SBI, with its heritage dating back to the year 1806, strives to continuously provide latest and upto date information on its financial performance. It is our endeavor to walk on the path of transparency and allow complete access to all the stakeholders enabling total awareness about the Bank. The Bank communicates with the stakeholders through a variety of channels, such as through e-mail, website, conference call, one-on-one meeting, analysts’ meet and attendance at Investor Conference throughout the world.

Please find below Bank’s financial results, analysis of performance and other highlights which will be of interest to Investors, Fund Managers and Analysts. SBI has always been fundamentally strong in its core business which is mirrored in its results – year after year.

EVOLUTION OF SBI:

The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernise India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework

The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board.

The business of the bank

The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden.

Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.

History of state bank of India:

Bank of Bengal H.O.

Establishment

The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock banking in India. So was the associated innovation in banking, viz. the decision to allow the Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a restricted geographical area. This right of note issue was very valuable not only for the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially upto the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the investible resources of the banks.

Business

Major change in the conditions

A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. None of the three banks had till then any branches (except the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters had given them such authority. But as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centres in India. While the Bank of Bengal had eighteen branches including its head office, seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.

Presidency Banks Act:

The presidency Banks Act, which came into operation on 1 May 1876, brought the three presidency banks under a common statute with similar restrictions on business. The proprietary connection of the Government was, however, terminated, though the banks continued to hold charge of the public debt offices in the three presidency towns, and the custody of a part of the government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter could look upon them more as a favor than as a right.

The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centers of the presidency.

India witnessed rapid commercialization in the last quarter of the nineteenth century as its railway network expanded to cover all the major regions of the country. New irrigation networks in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops, a portion of which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of estate agriculture par excellence. All these resulted in the expansion of India's international trade more than six-fold. The three presidency banks were both beneficiaries and promoters of this commercialization process as they became involved in the financing of practically every trading, manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing industries, the Bank of Madras went into the financing of large modern manufacturing industries; the Bank of Madras went into the financing of small-scale industries in a way which had no parallel elsewhere. But the three banks were rigorously excluded from any business involving foreign exchange. Not only was such business considered risky for these banks, which held government deposits, it was also feared that these banks enjoying government patronage would offer unfair competition to the exchange banks which had by then arrived in India. This exclusion continued till the creation of the Reserve Bank of India in 1935.

First Five Year Plan:

In 1951, when the First Five Year Plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state-partnered and state-sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later named Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking subserving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.

RBI survey lowers GDP growth forecast to 5.7%

Personal loans grew at just 8.5 per cent in the last one year compared with 13 per cent growth registered in the previous year.

Our Bureau

Mumbai, April 20 The median forecast of real GDP growth, according to the Reserve Bank of India’s latest professional forecasters’ survey, for 2009-2010 has been revised downwards to 5.7 per cent from 6 per cent.

The central bank, in its report on the Macroeconomic and Monetary Developments in 2008-2009, said that the various surveys of economic activity point towards prevalence of less-than-optimistic sentiment for the outlook of the economy in the coming months.

Between the sixth round survey conducted in December 2008 and seventh round survey in March 2009, median forecast of real GDP growth for 2008-09 was revised downwards to 6.6 per cent from 6.8 per cent.

According to the report, for the April-June 2009 quarter, the overall net sentiment for all industries, except textiles, is positive. Moderate growth is expected across the various companies in the first quarter. However, the expectations are less optimistic for smaller companies compared with their bigger counterparts.

Inflation:

On the inflation front, the report underscored the fact that unlike the wholesale price index based inflation, consumer price index based inflation in India remains high, with recent evidence of very slight moderation. “The transmission process of lower inflation at the wholesale level to inflation at the retail level has emerged as an important issue in the conduct of RBI’s monetary policy,” the report said.

The WPI-based inflation eased to 0.18 per cent for the week ended April 4 from 0.26 per cent for the previous week. Various measures of consumer price inflation, though started declining, still remained high in the range of 9.6-10.8 per cent during January/ February 2009.

The higher level of consumer price inflation (CPI) as compared with WPI inflation , in recent months, could be attributed to higher prices of food articles, which have higher weight in CPI.

Scheduled commercial banks (SCBs’) investment in statutory liquidity ratio (SLR) securities as a per cent of their net demand and time liabilities (NDTL) increased at end-March 2009 to 28.1 per cent, from 27.8 per cent a year ago.

However, adjusted for Liquidity Adjustment Facility collateral securities on an outstanding basis, SCBs holding of SLR securities amounted to Rs 11,10,156 crore or 26.7 per cent of NDTL at end-March 2009 – implying an excess of Rs 1,13,817 crore or 2.7 per cent of NDTL over the prescribed SLR of 24 per cent of NDTL.

The lower expansion in credit relative to the expansion in deposits resulted in a decline in the incremental credit-deposit ratio (y-o-y) of SCBs to 64.4 per cent at March-end 2009 from 73.6 per cent a year ago.

State Bank of India offers the following services to its customers -

Domestic Treasury.
SBI Vishwa Yatra Foreign Travel Card.
Broking Services
Revised Service Charge.
ATM Services.
Internet Banking.
E-Pay.
E-Rail.
RBIEFT.
Safe Deposit Lockers.
Gift Cheques.
MICR Codes.
Foreign Inward Remittances.

SWOT ANALYSIS of STATE BANK OF INDIA

STRENGTHS

· India’s top bank and best among nationalized banks

· Provide better infrastructure than any other nationalized bank

· There are 21 branches existing as per now including Jaipur and more than 10000 branches all over India.

· State bank of India provide various types of home loan and personal products at low interest rates other banks.

· SBI Bank make good relationship with customers and provide extra unique features for the customer who wants to take loan from bank

· Provide all types of insurance advisories

· Provide all types cross banking products as any other private sector bank.

· The transparency is also much better from other bank with least employee turnover.

· Bank is going for global zing its operation

· Marketing network development at head office.

WEAKNESSES

· Average waiting time for the customer is 15 to 20 minutes.

· No separate customer care unit.

· Rude attitude of the employees.

· There is no separate marketing cell in jaipur branches.

· No other facility such as phone banking, multiplicity and free financial advice of the bank.

· Reduced banking hours.

OPPORTUNITIES

· Setup a marketing cell at the local branch.

· Ensure that loans are diversified across several customer segments

· Introduce robust risk scoring techniques to ensure better quality of loans, as well as to enable better risk-adjusted returns at the portfolio level.

· Improve the quality of credit monitoring systems so that slippage in asset quality is minimized

· Raise the share of non-fund income by increasing product offering wherever necessary by better use of technology

· Reduce operating expenses by upgrading banking technology Improve the management of market risks; and finally

· Reduce the impact of operational risks by putting in place appropriate frameworks to measure risks, mitigate them or insuring them.

THEREATS

· Growth of private players has led to shifting emphasis from public sector banks.

· Increase in foreign banks resulted in taking away business from PSU’s

· Increasing cross selling of products through banks.

Internet banking at State Bank of India

· In early 1990’s more than 7000 branches were using traditional manual procedures.

· These manual procedures were inherited from the Imperial Bank.

· Traditional procedures were evolved over decades

· Very few changes were brought in those procedures as per the need of time.

· Internet Banking facility for Corporate customers were also launched in early 2008

· More Interfaces developed with e-Commerce & other sites through alternate channels like ATM & Online Banking

· All Foreign Offices were brought on Centralized Solution

· Large network is playing the role of backbone for connectivity across the country

· Multiple Service Providers are providing the links – BSNL, MTNL, Reliance, Tata & reliance which are making the system errorless and provide high speed.

· Multiple Technologies to support the networking infrastructure – Leased lines, Dial-up, CDMA & VSAT CBS - Core Banking System Components

INTERNET BANKING SERVICES PROVIDED BY SBI

ATM (Automatic Teller Machine)
TELE BANKING
Phone Banking
Online applications
Account Access
Account transfers
Bill Payment
Benefits at participating online merchants
24/7 customer service
Access to old transactions
Categorize transactions and produce reports
Export your banking data
Loan status and credit card account information
Online payment system
Online Security system

ATM (Automatic Teller Machine)

An unattended electronic machine in a public place, connected to a data system and related equipment and activated by a bank customer to obtain cash withdrawals and other banking services. Also called automatic teller machine, cash machine; Also called money machine.

An automated teller machine or automatic teller machine (ATM) is an electronic computerized telecommunications device that allows a financial institution's customers to directly use a secure method of communication to access their bank accounts, order or make cash withdrawals (or cash advances using a credit card) and check their account balances without the need for a human bank teller (or cashier in the UK). Many ATMs also allow people to deposit cash or cheques transfer money between their bank accounts, top up their mobile phones' pre-paid accounts or even buy postage stamps.

On most modern ATMs, the customer identifies him or herself by inserting a plastic card with a magnetic stripe or a plastic smartcard with a chip, that contains his or her account number. The customer then verifies their identity by entering a passcode, often referred to as a PIN (Personal Identification Number) of four or more digits. Upon successful entry of the PIN, the customer may perform a transaction.

If the number is entered incorrectly several times in a row (usually three attempts per card insertion), some ATMs will attempt retain the card as a security precaution to prevent an unauthorised user from discovering the PIN by guesswork. Captured cards are often destroyed if the ATM owner is not the card issuing bank, as non-customer's identities cannot be reliably confirmed.

The Indian market today has approximately more than 17,000 ATM’s.

TELE BANKING:

Undertaking a host of banking related services including financial transactions from the convenience of customers chosen place anywhere across the GLOBE and any time of date and night has now been made possible by introducing on-line Telebanking services. By dialing the given Telebanking number through a landline or a mobile from anywhere, the customer can access his account and by following the user-friendly menu, entire banking can be done through Interactive Voice Response (IVR) system. With sufficient numbers of hunting lines made available, customer call will hardly fail. The system is bi-lingual and has following facilities offered

• Automatic balance voice out for the default account.

• Balance inquiry and transaction inquiry in all

• Inquiry of all term deposit account

• Statement of account by Fax, e-mail or ordinary mail.

• Cheque book request

• Stop payment which is on-line and instantaneous

• Transfer of funds with CBS which is automatic and instantaneous

• Utility Bill Payments

• Renewal of term deposit which is automatic and instantaneous

• Voice out of last five transactions.

Phone Banking

This means carrying out of banking transaction through the telephone. A customer can call up the banks help line or phone banking number to conduct transactions like transfer of funds, making payments, checking of account balance, ordering cheques, etc,. This also eliminates the customer of the need to visit the bank’s branch.

Online applications

Consumers can begin their banking relationship with an online application. No need to waste time driving to a local branch to begin a banking relationship. Consumers can fill out and submit electronically all necessary information needed to open a checking, savings account or even a fixed deposit. When the application is submitted, the bank will mail you a signature card for its records and request you to mail or wire your initial funds. Some firms like American Express and CompuBank enable customers applying for an account to fund their new account electronically via a credit card or cheque from another banking institution. There are some firms such as Wingspan and USA BancShares.com that enable customers to digitally sign their applications.

Account Access

Internet banking customers now have the ability to view their accounts online, including checking, savings, loans and credit cards. No need to wait for your monthly statements or wait in queue for the next available customer service representative. Account access enables customers to view most recent activity on accounts, including cleared checks, deposits, ATM transactions and balances as of previous days activities. Customers no longer have to hold on to the cleared checks, since their bank will store them for them online.

Account transfers

Internet banking customers have the ability to transfer funds to and from their accounts online. With a simple online form, customers can move money from a checking account to a savings account and vice versa within the safety and convenience of their home –- without having to visit the ATM. Funds transferred online are updated in less than three hours. In addition, customers can set up recurring transfers to accounts. A recurring transfer will take place on the customer specified date, with a specified amount.

Bill Payment

Online bill payment enables customers to pay anyone, friends or family, as well as a pay their bills electronically. As an add on feature to Internet banking, bill payment enables customers to send paper checks to anyone or an electronic check to any institution that accepts electronic bill payments. To use bill payment, customers are required to set up their payees online. Customers then have the ability to set up recurring, automatic payments to a specific biller on a specified day or just a one-time payment. Arrange payments three to five days, before the due date, to ensure timely delivery. It is important to note that not all banks provide bill payment as a free feature.

Benefits at participating online merchants

The banks partner with online merchants to offer discounts when a purchase is made with the card.

24/7 customer service

Although it is easy to yield to the temptation of allowing the Internet to replace expensive branch personnel and overhead, many banks have found that an customer service staff ready at any hour is well worth the expense. This can be especially true as customers transition to online banking and need help learning the features. Offering telephone and email contacts is a basic level of service. Offering live chat assistance is the exceptional level.

Access to old transactions

Choices made in designing the Internet interface may include how much history will be available online. Some banks have chosen to show only 30-45 days, while others offer a history of six months or a year.

Categorize transactions and produce reports

Functionality is king as online banking customers using these features enjoy a Web interface that delivers the utility of a money management software application.

Export your banking data

Most banks offering the management interface also allow easy downloading of financial information into files that can be imported into Microsoft Money and Intuit's Quicken.

ONLINE PAYMENT SYSTEMS

What is a Payment System?

Payment means the transfer of money. In its simplest form, a payment system is an agreed upon way to transfer value between a buyer and a seller in a transaction. When coupled with rules and procedures, the payment system provides an infrastructure for transferring money from one entity in the economy to another. Payment systems can be distinguished by the mechanisms used to transfer value in an exchange of goods or services.

Electronic Payment Systems

Electronic payment systems exist in a variety of forms, which can be divided into two groups: wholesale payment systems and retail payment systems. Wholesale payment systems exist for non-consumer transactions--transactions initiated among and between banks, corporations, governments, and other financial service firms.

Retail electronic payment systems encompass those transactions involving consumers. These transactions involve the use of such payment mechanisms as credit cards, automated teller machines (ATMs), debit cards, point-of-sale (POS) terminals, home banking, and telephone bill-paying services.

Wholesale Payment Systems

Wholesale payment systems are also called Large Value Payment Systems. Large value funds transfer systems are usually distinguished from retail funds transfer systems that handle a large volume of payments of relatively low value. The average size of transfers through large value funds transfer systems is substantial and the transfers are typically more time critical.

There are two types of wholesale payment systems – net settlement systems and gross settlement systems. Large Value funds transfer systems can also be classified according to the timing (and frequency) of settlement. Systems can in principle be grouped into two types - designated time (or deferred) settlement systems and real-time (or continuous) settlement systems, depending on whether they settle at pre specified points in time or on a continuous basis.

Net Settlement Systems

In a net settlement system, the settlement of funds transfers occurs on a net basis according to the rules and procedures of the system. A participating bank's net position is calculated, on either a bilateral or a multilateral basis, as the sum of the value of all the transfers it has received up to a particular point in time minus the sum of the value of all the transfers it has sent. The net position at the settlement time, which can be a net credit or debit position, is called the net settlement position.

Gross Settlement System

In a gross settlement system, on the other hand, the settlement of funds occurs on a transaction by transaction basis, that is, without netting debits against credits.

Designated Time Settlements

Designated time (or deferred) settlement system is one in which final settlement occurs at one or more discrete, pre specified settlement times during the processing day. Designated time settlement systems in which final settlement takes place only once, at the end of the processing day, are called end of day settlement systems. Currently, net settlement systems for large value transfers are typically end of day net settlement systems that settle the net settlement positions by means of transfers of central bank money from net debtors to net creditors.

In some countries, there are systems in which the final settlement of transfers occurs at the end of the processing day without netting the credit and debit positions - on a transaction by transaction basis or on the basis of the aggregate credit and aggregate debit position of each bank. Such systems are often called end of day gross settlement systems.

Real time Settlement Systems

A real time (or continuous) settlement system is defined as a system that can effect final settlement on a continuous basis during the processing day. RTGS i.e. Real Time Gross Settlement systems, as defined below, fall into this category.

Types of large value funds transfer system

Settlement characteristics	Gross	Net
Designated time (deferred)	Designated time gross settlement	Designated time net settlement (DNS)
Continuous (real time)	Real time gross settlement (RTGS)	(Not applicable)*
* By definition, netting involves the accumulation of a number of transactions so that credits can be netted against debits and this is incompatible with genuinely continuous settlement.

Retail Payment Systems

Retail payment systems are also called small value payment systems.

An important emerging mechanism for enabling small-value payment systems is electronic money. Electronic money is a payment mechanism that is a direct substitute for traditional cash; value is transferred electronically to pay for goods and services at vending machines, retail establishments, over networks, or through direct person-to-person exchanges.

Electronic money offers some features that make it an attractive alternative over other payment mechanisms. Electronic money does not have to be designed to faithfully emulate all the properties of paper cash. It can be implemented to preclude some features of paper cash, such as complete anonymity, while including other desirable attributes of paper cash, such as full divisibility, assignment of limits and constraints, and links to the current owner.

The following are some types of electronic money available over the net worldwide.

First Virtual

The account is set up by phone using a traditional credit card number and a First Virtual account number is issued. Clients provide their credit card numbers to First Virtual over the phone or other non-Internet method, and are issued a personal account number to make purchases over the Internet. This payment mechanism allows the user to order goods online and then charges the user's credit card company on behalf of the online merchant. The merchant reports the transaction amount with the First Virtual account number. First Virtual then confirms the purchase with the customer via email. No special software is required for either purchaser or merchant.

DIGI CASH

David Chaum, a mathematician and privacy expert, founded DigiCash. This provider creates e-cash, proprietary electronic cash tokens, which are marketed as being the equivalent of cash. An account is established at a DigiCash-licensed bank with real money. Once established, the customer can withdraw e-cash that is stored on the user computer's hard drive. Using proprietary software, e-cash can be spent with an Internet merchant or with anyone else whose computer is set up to deal in e-cash. Using public-key cryptography, the digital tokens are said to be secure and can be registered and verified by the issuer without revealing to whom it was originally issued. In effect, these digital cash transactions are capable of being as anonymous as cash. No transaction confirmations are necessary, meaning the merchant can immediately ship the product.

CyberCash

This payment mechanism consists of a downloadable software package using public-key encryption that is designed to assure the security of credit card transactions over the Internet. The system protects the customer's authentication data. An account is set up and acts as an Internet front end to any existing credit card that is designated. When a purchase is made, proprietary software is used that sends the purchase and account information in encrypted form to the account provider. The provider in turn sends the information to the appropriate financial organization for processing.

NetCash

This concept is similar to e-cash, except that it does not require any special software to use. NetCash is transmitted across the Internet using an encryption scheme known as PGP (pretty good privacy). To get NetCash, a party must send a check or money order to the company's headquarters. The company returns electronic coupons via e-mail.

NetChex

This payment mechanism is similar to CyberCash for checking accounts.

Millicent

The Millicent method is developed by Digital Equipment Corporation (DEC) to manage small and smallest payments (e.g. payment for getting information from the Internet about news and stock quotations or payment for small programs like Java-applets)

The customer buys a broker scrip with a defined value by using his credit card or by debiting a suitable bank or broker account. Such scrip is like a telephone card. At the time of purchase the customer exchanges parts of the scrip into a dealer's scrip. This scrip is then send to the dealer. The dealer collects all scrips and exchanges them into "real" money.

Electronic Checking Accounts

Several organizations and coalitions of organizations have been trying to create ways of using existing checking accounts over the Internet. In most of those efforts, the consumer uses his or her checking account with a bank or service and then draws down those funds using special electronic checks and digital signatures. Generally, those programs are not as close to a major commercial introduction as are those based on credit cards or electronic scrip. Many observers feel that electronic checks, despite a slow start, could become a widely used method for making payments.

Credit Cards

The credit card is usually a four-party card which involves two banks in each transaction, the cardholder's bank (the issuer of the card) and the retailer's bank. The retailer hands over the credit card slips to its own bank for payment, less a discount, typically about 2-3%. The retailer's bank then passes the slips on to a clearing system. The clearing system presents each slip for payment to the bank that issued the card on which it was written. The issuing bank collects from the cardholder. All of these exchanges are now done by wire.

Debit Cards

Debit cards are also known as check cards. Debit cards look like credit cards or ATM (automated teller machine) cards, but operate like cash or a personal check. Debit cards are different from credit cards. While a credit card is a way to "pay later," a debit card is a way to "pay now." When you use a debit card, your money is quickly deducted from your checking or savings account.

Debit cards are accepted at many locations, including grocery stores, retail stores, gasoline stations, and restaurants. You can use your card anywhere merchants display your card's brand name or logo. They offer an alternative to carrying a checkbook or cash.

Stored Value Card Scheme or Smart Cards

Smart card technology represents a real change in how and where information is processed. The smart card is a credit card-sized payment mechanism with an integrated circuit chip embedded within the card. The embedded chip enables the card to contain significant amounts of data including prepaid stored value. The embedded chip can also hold programs that interact with data either contained on the chip or external to the chip. These programs can be permanent and unchangeable or can be modified when the card is connected to a network. Data can be stored, updated, and retrieved both when the card is issued and throughout its life. However, because of the embedded chip, the smart card operates as a stand alone payment mechanism--in effect, a direct substitute for cash--without requiring online network connections. This stored value can be accessed and altered by terminals at a merchant's establishment or at remote locations. A consumer with a smart card can go to a bank or ATM and have the card loaded with a certain amount of value. The consumer can then proceed to make purchases, up to the amount of stored value, in the same manner as if currency were being used. At each terminal, the device reads the smart card to determine that there is sufficient value available and deducts the amount of the transaction. When the card's value has been exhausted, the consumer can return to the bank or ATM to replenish the value.

The strength of this scheme is that it avoids the need to identify the user and access the user's bank account or credit card in order to verify funds availability because the only funds available are those that are on the card. This eliminates the problem of retailers who are reluctant to accept payment by check due to concerns about funds availability.

Mondex

Mondex is owned by Master Card and National Westminster Bank of London and is being tested in several countries. Mondex uses a smart card to store electronic cash that can be used to pay for goods and services in the same way as cash but with some key benefits over traditional cash.

ONLINE SECURITY SYSTEMS

The concern of security remains the largest barrier to the growth of online banking. Most people seem to believe that it is a hacker jungle out there, and stay very wary of trying to simplify their lives by using cyberspace.

Most institutions providing online banking services are very security conscious. After all, they wouldn’t want to open their computers to a stampeding public, would they? The security measures that organizations take over the Web are simply invincible, unlike the surveillance cameras and lobby guards posted in many banks. If the general public is not aware of, or does not understand, the many features put into place to guard their finances, then people remain skeptical.

Depending on how online accounts are accessed, security can be guaranteed in a variety of ways. Moreover, when a bank offers online service, it is not opening its mainframe computers to the world. Usually, the bank installs a group of separate computers that stand between the mainframe computer and the network that will deliver data to your PC. At several points along the way, protection is built in.

Some of the most common security features are firewalls, data encryption, and passwords/personal identification numbers.

Firewalls

A firewall is a computer or software that protects the bank’s computers and data from being accessed by any outsider. This firewall is located at the point where the bank’s world connects with the rest of the world. This firewall is basically a gatekeeper, checking each attempt at delivery of data with a list of strict specifications; any criteria not met; does not make it past the firewall.

Public Key Infrastructure

Public key infrastructure can be defined as a solution to ensure secure electronic business communication incorporating signatures and encryption technology.

Every user in a PKI transaction owns a pair of keys: A public key known to everybody and a private key known only to the owner. The keys have 2 main characteristics. One, they are complimentary sets of passwords. This means that a document encrypted by a public key can only be decrypted by a private key and vice-versa. Two, the keys are a unique pair.

Lets now see how PKI compares with existing security technologies. Anti-virus is merely for integrity, Firewalls give authentications and confidentiality, Access is similar to firewalls; encryption ensures confidentiality. Thus PKI emerges as the only solution that guarantees all the four pillars of security and trust viz. authentication, non-repudiation, integrity and confidentiality.

Encryption

Encryption is the process of converting information into a more secure format for transmission. In other words the plain text is converted to scrambled code while being transmitted, and then decrypted back to plain text at the receiving end of the transmission. It is comparable to writing a letter, converting it to code, putting it in an envelope and mailing it with the recipient descrambling the code.

Currently, there are 2 levels of encryption generally available in web browsers: 40-bit encryption, and 128-bit encryption. Most commonly available browsers use 40-bit encryption. However, the 128-bit browser offers the highest level of encryption and provides the best protection when transmitting confidential data over the Internet. The difference between these two types of encryption is one of capability. 128-bit encryption is exponentially more powerful than 40-bit encryption.

Digital Signatures

Digital signatures essentially use encryption to scramble information in a way that only the party who issued the certificate (usually the online store or a trusted third party) can decrypt and read.

By using digital signatures, consumers are reassured that any sensitive information they send across the Web, such as postal addresses and credit card details, is protected from interception along the way. Meanwhile, online merchants can be more confident that the customer placing the purchasing order is indeed entitled to use the payment card in question. Security experts believe that digital signatures will encourage more consumers to purchase goods online.

Access Codes

The access codes used to identify you to the online banking system are called passwords, and are further protected by using PINs (Personal Identification Numbers).

1.Use of internet banking in state bank of India-

The Internet banking portal of bank enables its retail banking customers to operate their accounts from anywhere anytime, removing the restrictions imposed by geography and time. It's a platform that enables the customers to carry out their banking activities from their desktop, aided by the power and convenience of the Internet.

Using Internet banking services, you can do the following normal banking transactions online:

	· Funds transfer between own accounts.
	· Third party transfers to accounts maintained at any branch of SBI
	· Group Transfers to accounts in State Bank Group
	· Inter Bank Transfers to accounts with other Banks
	· Online standing instructions for periodical transfer for the above
	· Credit PPF accounts across branches
	· Request for Issue of Demand Draft
	· Request for opening of new accounts
	· Request for closure of Loan Accounts
	· Request for Issue of Cheque Book

2. SBI net banking charges-

FEES AND CHARGES

Apart from the charges levied in respect of each product and service selected by the Customer under SBI Electronic Banking Service, SBI shall impose such subscription and other fees, transaction charges, other charges and interest rates (collectively, the

"Charges") as it may at any time, in its sole and absolute discretion, determine. The Charges are subject to change from time to time. SBI shall be entitled to recover from

the Customer, all out-of-pocket expenses incurred on the Customer’s behalf. SBI shall

notify the Customer of the Charges incurred for each transaction made by the Customer under Electronic Banking Service. The Customer shall also bear all applicable value added, customs and excise and goods and services taxes and any other taxes, levies or charges whatsoever now or hereafter imposed by law or required to be paid in respect of SBI Electronic Banking Service and reimburse SBI for any such payment made by SBI.

SBI shall be entitled, in the execution of any instruction, to deduct Charges from any

Account(s) named in the transaction. The Customer’s obligation to pay SBI for the Charges and all outstanding monies shall survive deactivation or revocation of SBI Electronic Banking Service or the termination of this Agreement. All other agreements

between the Customer and SBI for payment of Charges shall continue to be in force

and are in addition to and will not be prejudiced or affected by the terms and conditions

of this Agreement.

The Customer shall comply with all terms (including third party terms and conditions)

and bear all charges incurred in using SBI Electronic Banking Service including without

limitation to internet service providers' fees and telecommunication service providers'

fees incurred in the use of SBI Internet Banking Service.

3. SBI ELECTRONIC BANKING SERVICE TERMS AND CONDITIONS

The terms and conditions herein shall apply to use of SBI ATM Service, SBI Phone Banking Service and SBI Internet Banking Service by the Customer.

1. “Account(s)” means all accounts (whether single or joint but excludes Joint Accounts requiring joint signing authority only) maintained by the Customer from time

to time with SBI

2 “Digital Certificate” means the combination of codes issued by a certification authority recognized by SBI and stored or associated with any Security Devices.

3 “Password” means any personal identification number, word, depiction, phrases, symbols, codes or other identification (electronic or otherwise) issued or assigned by SBI to the Customer or otherwise selected by the Customer to enable the Customer access to any account and/or to operate any Security

4 “User ID” means the unique personal identification name, number, character or combination of any of these ssued or assigned by SBI to the Customer, which designates the Customer as the user of the SBI Internet Banking Service and which enables the Customer access to the Customer’s Account(s) and/or to operate any Security Device on behalf and/or to utilise the services offered or provided by SBI.

4. SBI ATM SERVICE-

SBI ATM Service enables the Customer to have access to the Account(s) and/or various banking transactions which include without limitation to, the withdrawal and deposit of funds, payment of bills and update of particulars through automated cash deposit machines, automated teller machines and/or any other equipment as SBI may in its sole and absolute discretion designate for such purposes. Upon the Customer’s request for SBI ATM Service to be made available for the operation of the Customer’s Account(s), SBI may at its sole discretion, provide the Customer with an ATM card, allocate and notify the Customer of the ATM Personal Identification Number (“ATM PIN”).

5. SBI PHONE BANKING SERVICE

Where the Customer requests for SBI Phone Banking Service to be made available for the operation of any Account(s), SBI may at its discretion, allocate and notify the Customer a Phone Code and Telephone Personal Identification Number (“Telephone PIN”).

6. SBI INTERNET BANKING SERVICE

SBI Internet Banking Service enables the Customer to have access to the Account(s)And/or to effect certain banking transactions, including without limitation to, instructingSBI on funds transfer, bill payments by electronic means through the use of personalcomputers or other access Security Device, including without limitation to mobile phone and television (“Customer Terminals”). Where the Customer requests for SBI Internet Banking Service to be made available for the operation of the Customer’s Account(s), SBI may at its discretion, allocate and notify the Customer of a User ID and a Password. The Customer may access to the Account(s) upon the correct input of the

ARTICLE OF E BANKINE

1. ONLINE BANKING, stated by lorenzo luiz this is not really about online banking but the category is about “tips for freelancers” i am also a freelancer specifically in the graphics and media industry. and one of the tips i could give in temrs of spreading the new in the internet regarding your services online is to have a great tittle or a catch phrase. one of the tools i use to attain this is glyphius 2008 (it automatically rates the “click ability” of your title) its a really neat tool, but does not replace the skill that we possess

2. JIBC stated by Electronic Banking has been widely used in developed countries and is rapidly expanding in developing countries. In Ethiopia, however, cash is still the most dominant medium of exchange, and electronic payment systems are at an embryonic stage. In the face of rapid expansion of electronic payment systems throughout the developed and the developing world, Ethiopia’s financial sector cannot remain an exception in expanding the use of the system. Thus this study is conducted with the following objectives.

· To describe and differentiate between different e-banking techniques

· To conduct a survey on the existing operating style of banks in Ethiopia.

· To analyze the status of electronic banking in Ethiopia

· To investigate the main challenges and opportunities for e-banking in Ethiopia.

· To recommend appropriate actions to be taken to promote e-banking in Ethiopia.

3. PROSPECTRS FOR E-BANKING DEVELOPMENT stated by Yayehyirad Kitaw Opportunities offered by ICT through e-learning programs. The School Net program introduced in Ethiopia to connect more than 500 Schools creates opportunities to citizens to be familiar with ICT applications and increases the awareness of the public

4. E-banking in India – Challenges and opportunities, Stated by R.K Uppal and Rimpi Jatana Low level of internet penetration and poorly developed telecommunication infrastructure, lack of suitable legal and regulatory framework for e-commerce and e-payment, high rates of illiteracy, high cost of Internet, absence of financial networks that links different banks, lack of reliable power supply, and Cyber security issues are the most important challenges for development of e-banking in INDIA.

5. Customer perception, Adult customers, E-banking, Security & Privacy, stated by Abdulwahed Mo. Sh. Khalfan and Yaqoub S.Y. AlRefaei Electronic banking is offering its customers with a wide range of services: Customers are able to interact with their banking accounts as well as make financial transactions from virtually anywhere without time restrictions. Adult customers are changing their existing pattern of use of traditional banking and switch over advanced self-service technology (Curran and Meuter, 2007). Liao and Cheung (2002) stated that willingness to use Internet banking depends on the expectations of accuracy, security, network speed, user-friendliness, user involvement, and convenience. A study between Turkey vs. UK has been found that Privacy is the single most important characteristic because of its effect on customers’ perceptions. To access the private information shared between the bank and the customer (Sayar and Wolfe, 2007).

6. THE BANKING INDUSTRY AND THE APPLICATIONS OF E-BANKING, stated by Belanger, F., Hiller, J.S. and Smith Banking has never been more important to our society than it is today. The way Bill Gates (2008) announced that « banking is essential, banks are not ». This quotation means that the traditional bank branch is going to vanish in order to be surrogated by electronic banking which continues to attract new users. The banking industry believes that by adopting new technology, the banks will be able to improve customer service level and tie their customers closer to the bank.

7. Online banking: a field study of drivers, stated by Dr. Saroj K. Datta The main benefit from the bank customers’ point of view is significant saving of time by the automation of banking services processing and introduction of an easy maintenance tools for managing customer’s money. The main benefits of e-banking are as follows:

· Increased comfort and timesaving-transactions can be made 24 hours a day, without

· requiring the physical interaction with the bank.

8. THIRD SECTOR COMMUNITY E-BANKING, stated by Graven Community e-Banks can gain the expertise they require and cultivate exceptional local talent to implement their third sector missions in a very short time span. Banks electing to enter the third sector market can ramp up rapidly with training and assistance provided by a small cadre of third sector banking consultants.

9. Factors influencing e-banking adoption, stated by Lee the scope of the adoption decision are large, it depends on customers’ benefits and risks perceptions and it includes both positive and negative factors: “perceived benefits” and “perceived risks” of online banking.

10. The impact of Internet when developing Banking strategies, stated by Salehi, M. and Alipour I think Internet gives specific coverage to bankers' YM banking policies, whether or not they sell directly to the public, as the final customers are instantly informed of interest rate changes through the distribution channel. However, these techniques do not allow certain segments of consumers to be taken into account.

11. Internet Banking Adoption Among Young Intellectuals, stated by Hanudin Amin Although internet banking provides flexibility in performing financial transaction, fast and easy, however Malaysians are still reluctant to adopt the system because of several reasons. First, the security and privacy are two elements in the perceived credibility. Without a proper knowledge of the system, individuals are not interested to test the system in my view.

12. Mobile banking facility for Surat's migrant workers, stated by TNN Migrant workers of Surat will now be able to transfer funds to their families settled in Orissa without going to the banks, post offices or through somebody visiting their native place. The Axis Bank is embarking on a mobile banking project in three corridors of the country to provide banking services to the migrants. The project will cover migrant labourers in three corridors including Surat-Ganjam, Delhi-Muzaffarpur and Dharavi-South India . "The project is in experiment stage and the services will start within three months.

13. RBI hikes limit on payment via mobiles, stated by TNN RBI on Thursday increased the cap on transferring funds or payments through mobile phones to Rs 50,000. Earlier, the ceiling for fund transfer against shopping was at Rs 5,000 and against purchasing of goods and services was at Rs 10,000. "Banks are now permitted to offer this (mobile banking) service to their customers subject to a daily cap of Rs 50,000 per customer for both fund transfer and transactions involving purchase of goods/services," RBI said in a notification.

14. Bank to offer mobile banking facilities, stated by TNN The Vijaya Bank will go a step ahead in providing trendy services to its customers through the mobile banking facility, scheduled for launch on September 29. Disclosing this to reporters here on Wednesday, the bank's chairman and managing director Albert Tauro said they are hoping that at least 10,000 of its customers get registered for the new facility before the launch. He said Vijaya Bank will be the second nationalized bank to launch such a facility, after Union Bank of India.

15. How to avoid mobile banking fraud, stated by TNN he mobile phone culture is growing and has penetrated the urban and semi-urban population in India. The number of mobile users is estimated to have far surpassed the number of Internet users. In the same order, mobile banking is getting wider acceptance, but the convenience it offers has its own share of risk. It is therefore even more important to be aware of the safeguards for the secure usage of this medium for financial transactions. Use the phone-lock function on your mobile device when it is not in use. Choose passwords which are difficult to crack and keep them safe.

16. Mobile blood bank to roll out, stated by TNN The largest blood bank in the city - Government General Hospital, which collects at least 75 units of blood every day is set to launch a mobile bank from next month. One unit is equal to 350 ml. The mobile bank - a bus with six donor beds - will be flagged off on October 1, the national voluntary blood donation day. The bank will go around the city and collect of blood from voluntary donors every single day of the year. The idea behind touring around the city is to create awareness about blood donation and draw more donors

17. RBI hikes limit on payment via mobiles, TNN stated by RBI on Thursday increased the cap on transferring funds or payments through mobile phones to Rs 50,000. Earlier, the ceiling for fund transfer against shopping was at Rs 5,000 and against purchasing of goods and services was at Rs 10,000. "Banks are now permitted to offer this (mobile banking) service to their customers subject to a daily cap of Rs 50,000 per customer for both fund transfer and transactions involving purchase of goods/services," RBI said in a notification

18. Enabling micropayments using cell, stated by Ashok Jhunjhunwala India has largely been a cash economy. Credit cards are still used by a small fraction of Indians. Debit cards are much larger in number, but used primarily to withdraw cash from ATMs. Cheque payments do exist, but largely in the corporate sector and for some bill payments. Internet payments are yet to take off. It is in this scenario that the launching of mobile banking and payments has the potential of transforming India's cash economy. Firstly, it is aimed at micropayments ; even payments of Rs 50 can be made easily.

19. Are you banking more on your mobile? Stated by Rumpa Gupta Imagine being stuck in a traffic jam, unable to reach your bank and get details of the last three transactions. Actually, you needn't worry. You can now 'bank' on your mobile. Send an SMS to your bank's customer service number and within a few seconds get the details. All you need is a mobile phone and a PIN from your bank. But there's more to mobile banking than making a query. You can go much beyond that. "Shop on your mobiles and pay through your bank account from it," says Jyotsna Sekhri of customer services,

20. Karnataka Bank launches student prepaid card, stated by TNN City-based Karnataka Bank has added four more products to its list of technology driven products with the launching of the following services ? student prepaid card, mobile banking, online payment through debit card, and money plant international gold debit card. The bank has also opened 10 more ATMs across India, a press release from its planning and development department here states. Student prepaid card is exclusively for students. It is a re-loadable card that can be purchased in amounts ranging from Rs 1,000 to Rs 45,000.

21. Federal Bank to implement Cisco's WAN network, PTI stated by Private sector Federal Bank is planning to implement a multi-locational voice ready Wide Area Network (WAN) interconnecting its 421 branches across the country by December. "Networking company Cisco has already networked 250 Federal Bank branches till now. The Bank has also implemented Cisco Security for confidentiality of data over the network," a Cisco release said here. The bank's plan is to link its branches via a network of leased lines, with a network of 'ISDN' and Very Small Aperture Terminal (VSAT)

22. Banknet India to focus on e-payment systems stated by TNN Banknet India, focused on banking knowledge and research and one of the largest organisers of banking industry conferences, is organising the Third Annual Conference on Payment Systems in Banks on January 10 at Taj Lands End, Mumbai. The conference will be inaugurated by MV Nair, CMD, Union Bank of India, and will focus on automated clearing house, ECS, RTGS, NEFT, cheque truncation, ATMs, internet banking, mobile banking, card payments, technology and security issues in electronic payment systems, international remittance services et al. Banknet India's Second Annual Conference on Payment Systems in January last year had 550 participants from more than 100 banks and financial institutions and nearly 50 IT companies worldwide.

23. UTI Bank targeting 3-lakh debit card base stated by TNN UTI Bank Ltd is targeting a three-lakh debit cards base and doubling its retail loan portfolio in fiscal 2002-03. "The bank launched its debit card recently and already 65000 cards have been issued. By end of second quarter we should cross 1 lakh base. It is being issued free of cost to all account holders," said PJ Nayak, chairman and managing director of UTI Bank. Nayak said that retail advances are likely to be doubled to Rs 1000 crore in FY03 from Rs 500 crore achieved in FY02.

24. BoM aims at 20% growth this year stated by TNN City headquartered Bank of Maharashtra (BoM) has set for itself a target of 20 per cent growth in the year 2010-11. The bank intends to achieve this by qualitative and diversified growth in credit, chairman Allen Pereira told the bank's shareholders gathered for its annual general meeting on Friday. The bank's total deposits were 21.14 per cent higher at Rs 63,304 crore at the end of 2009-10, while advances were 17.55 per cent higher at Rs 40,926 crore during the year.

25. Breaking through stated by If the decade that draws to a close was indicative of how technology can change our lives, the decade that is on the horizon is set to make technology accessible across the spectrum. With connectivity as the mantra, the digital divide between haves and have-nots could soon be a thing of the past. Leading the charge is the revolution in mobile telephony that has been responsible for connecting people on an unprecedented scale. This has been possible in large part due to healthy competition amongst phone manufacturers and service providers that has seen prices of handsets and call rates drop dramatically.

26. Students given tips on mobile banking, stated by Shalini Kapur and TNN A mobile banking camp was organized at Magadh Mahila College on Monday by the State Bank of India (SBI), Personal Banking branch, Patna, for creating awareness among the younger generation about the Mobile Banking Services (MBS) provided by the bank. "Bank in your hand, that's SBI Mobile Banking," was how the 300 young girls of the college, who learnt the Mobile Banking Technique, reacted. Regional manager, Region II, SBI administrative office, Patna, Saloni Narain briefed the students about the techniques and detailed usages of mobile for banking transactions.

27. Mobile bank helping women to save, stated by TNN as more and more women take up employment outside their homes in the city, even those with smaller incomes are becoming conscious of saving for the proverbial rainy days. anuradha (28) works as a telephone operator in a private firm and earns a salary of about rs 2,300 every month. she has made it point to save rs 10 everyday, thanks to a scheme implemented by the mahila bank whereby officials of the bank visit depositors to collect the sum daily to her office. this saves a lot of time, and also ensures that even a small amount of money gets saved

28. Celforce ties up with IndusInd for mobile banking, stated by TNN hutchison fascel (celforce) and indusind bank have entered into an agreement to offer banking services on the celforce mobile. with indusmobile, a user friendly customer service, celforce users can now access their bank account on their celforce mobile, 24 hours a day, from over 124 cities and towns in gujarat and major countries around the world. the service allows the user to perform certain query-based transactions like balance enquiry, statement enquiry for the last three transactions, statement request, cheque book request, change current operative account and fixed deposit enquiry.

29. Mobile blood banks arrive in Rajasthan, stated by Avanindra Mishra and TNN With a capacity to stock 300 bags of blood and space to accommodate four blood donors simultaneously, donating blood is set to be much more easier in the state. The National AIDS Control Organisation (NACO) on Wednesday provided the state with two state-of-the-art mobile blood banks, each worth Rs 1.2 crore. Built inside a luxury bus, these mobile units are fully air-conditioned and ensure safe transfer of stored blood from the donation camp to the main blood bank.

30. BPL Mobile, ICICI Bank launch co-branded credit card, PTI stated by By new delhi: icici bank and bpl mobile cellular on monday announced launch of the icici bank-bpl mobile co-branded credit card in maharashtra and goa, tamil nadu and pondicherry and kerala circles. icici bank-bpl co-branded credit card would offer bpl mobile's existing customer base benefits like flexible and convenient payment facility, national roaming facility without additional deposit and mobile phone insurance, a joint statement by the two companies said here. speaking on the occasion, v vaidyanathan, managing director, icici personal financial services, said: "this co-branded card offers power-packed features such as accelerated reward points, automatic debit and waiver of additional deposits for roaming facility.

31. Now, transfer funds to any bank via mobile, stated by Manthan K Mehta and TNN In a new service that is set to revolutionize the retail money payment sector in India, consumers will now be able to transfer money from their accounts to any other account in the country using their cellphones via the National Payment Corporation of India's (NPCI) Inter-bank Mobile Payment Service (IMPS). The NPCI is the umbrella organization for all retail payment systems in the country owned and operated by banks. The system is as secure as the net-banking facility and get information.

32. Free mobile alert system launched, stated by Federal Bank, the Aluva based private sector bank, on Tuesday launched a free, comprehensive and flexible mobile alert service, which would mainly benefit its nearly four lakh NRI customers as they can receive updates on transactions in their accounts in Kerala instantaneously through their mobile. The Federal Bank is the third bank to offer the service in the country, the other two being ICICI and Citi Bank. The new facility provides customers SMS (Short Message service)

33. Increased profit for bank this year,stated by Ashok Jhunjhunwala Sri Kanyakaparameswari Co-operative Bank has bettered its performance by creating a record profit of over Rs 201 lakh during the financial year 2008-09. Addressing reporters here on Monday, Sri Kanyakaparameswari Co-operative Bank president M Shantharam said in 2007-08 the bank incurred Rs 162 lakh as profit whereas during this financial year it has risen to Rs 201 lakh. To shares its profits the board is recommending 20 percent dividend to its share holders, added Shanthamram.

.Research Methodology

TITLE OF THE STUDY:- USES OF INTERNET BANKING SERVICES PROVIDED BY PUBLIC SECTOR BANK WITH SPECIFIC REFRENCE OF SBI

DURATION OF PROJECT:

The project is completed within 3 month in this duration of three months following work schedule is use for completion of project.

1 month:

· . Selection of project title

· Prepare the synopsis

2 month:

· Collection of secondary data,

· Find out literature review related to project title

· Prepare the questionnaires,

· Fill the questionnaires

3 month:

· Analysis of questionnaires

· Preparation of research methodology

· Preparation of acknowledgement

· Preparation of core study & completion of project by Report frame & bibliography

OBJECTIVE OF THE STUDY

Find the customer satisfaction relating to E-Banking
To study the awareness of internet banking among the customer of public sector bank and SBI.

· To know how they can provide better services to customer.

TYPE OF RESEARCH: In this research the type of data collection is

· Primary data

· Secondary data

DATA SOURCE: The sources of collection of secondary data are:

· Questionnaire

· Books

· Websites

· Magazine

· Brochure

SAMPLING SIZE AND METHOD OF SELECTING SAMPLE:

It is very difficult to collect information from every member of a population. As time and costs are the major limitation that the researcher faces. A sample of 50 was taken the sample size of 50 individuals were selected on the basis of convenient sampling technique. The individuals were selected in the random manner to form sample and data were collected from them for the research study.

SCOPE OF THE STUDY

Future Scope of internet banking Internet banking usage and transactions is set to grow, and there is a combination of reasons for this. Some of them being increased transaction sets for end users; optimum channel availability; higher broadband penetration; decreasing prices of PC; and heightened awareness from an end customer's viewpoint. Internet banking will soon become one of the key fulcrums in ensuring that a customer is engaged with the bank and in touch with the changing environment. From the bank's point of view, Internet banking will become important since it is a window to reach out to customers, irrespective of their geographical location.

Internet banking on ambition growth path-With the IT revolution, the Indian banking and financial sector became the undisputed leader in adopting cutting edge technologies. And so began another phase of India's banking journey. The '90s saw the banking industry embrace technology massively, led in particular by the private and multi-national banks. Among all technology innovations, Internet banking for retail customers was a concept that changed the way banking had been perceived over the past decades. Not only did it generate a great deal of interest within the industry, it was adopted at a time when the Internet as a medium was slow to take-off.

LIMINATION OF THE STUDY:-

The study is limited to a particular branch of of public sector bank and SBI.
Banks are not giving me all information about E-banking services.
They do not permit to meet any of the employees in their bank.

FACTS AND FINDINGS OF THE STUDY

· From our study we find out that 42 male and 8 female are using E-banking services of all the banks. The male are having more knowledge about the transactions and having more knowledge about the services provided by the banks. Only the working ladies having knowledge about the services or the female having the knowledge but not of the all the services which are provided by the banks. So that’s why we considered only those persons who are having knowledge about all services of E-banking which is provided by the banks.

· Most of the respondents who lies under the age of 21-30 are using E-banking services as near about 40 respondents are using these services because under the age of these respondents they are having more knowledge about the services of e-banking.

· Most of respondents are business man and students are using E-banking services as near about 48 respondents are using E-banking services. Because the benefits which are having while using these services are more benefited by the business man people so they are availing these services more than the other respondents.

· The overall percentage of businessmen and students having complete knowledge about e-banking services provided by the bank while opening an account in it is 73% and the percentage of people have no awareness of e-banking services provided by the bank is 27%. It can reasonably, be concluded that nearly 73% of the population is having awareness about e-banking services.

· Among those aware (which account for 50 in number) about 48 persons use e-banking services, which is 96% of total population studied.

· E-banking constitutes services provided in terms of ATMs, Debit Card, Credit Card, Phone Banking, Mobile Banking, Internet Banking etc, of which the first six have been covered. Amongst these Debit Card scores the largest used service status (68%) Close on the heels is Mobile Banking (64.66%), Phone Banking (44.66%), while One Line banking lags behind by scoring the least ie.,0.08%.

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

· A study of the factors, influencing the usage was made by listing out various factors such as all time availability, ease of use, nearness etc., and amongst the various factors status symbol is ranked as the major motivating factor, followed by all time availability, friends, ease of use and direct access in decreasing order of importance. Quite interestingly security symbol scored the least motivating factors.

· Various people that included office staff help to collect the primary data on the basis of interviews, thoughts & suggestion

· The Main sources of Secondary data were combination of information from the internet, periodicals and books of the related topic.

DATA ANALYSIS AND INTERPRETATION

Are you holding any bank account?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
YES	50	100%
NO	0	00%

If yes than which type of account you hold in bank?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Saving account	28	56%
Fixed account	16	32%
Current account	6	12%

In which bank do you have your account?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
ICICI	3	6%
SBI	36	72%
HDFC	3	6%
PNB	5	10%
Other	3	6%

3. Since how many years are you using this bank account?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Less than one year	15	30%
1 to 5 years	25	50%
5 to 10 years	5	10%
10 to 15 years	4	8%
Above 15 years	1	2%

Are you availing E-banking services?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
YES	50	100%
NO	0	00%

5. Do you satisfy with the services provide by your bank?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
YES	40	80%
NO	10	20%

6. Which type of e-banking services you want to use?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Online funds Transfer	20	40%
Regular checking of bank statement.	32	16%
Online purchase and payment.	2	4%
Other service	20	40%

7. Do you like e banking services provide by SBI bank?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
YES	42	84%
NO	8	16%

8. Do you get timely feedback or response relating to your request or complain?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Always	33	66%
Sometimes	13	26%
Never	4	8%

Tick the feature which you like while considering in your bank?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Net Banking	4	8%
Credit Card Online	2	4%
Mobile Banking	6	12%
ATM	35	70%
Phone Banking	3	6%

Which of the following factors influence you the most to use E-banking services?

	Factors	Strongly	More than average	Average	Less than Average	Not at all
A	All time availability
B	Ease of use
D	Security
E	Direct access

To what extent are you satisfied with your Banks’ E-banking services?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Highly Satisfied	13	26%
Satisfied	25	50%
Neutral	7	14%
Dissatisfied	5	10%

Which of the following benefits accrue to you, while using E-banking services?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
Time Saving	15	30%
Inexpensive	9	18%
Easy Processing	10	20%
Easy Fund Transfer	9	18%
Any Other	7	14%

Would you like to use E Banking services after getting the required knowledge about the services offered by the banks?

PARTICULARS	NO.OF.RESPONDENT	PERCENTAGE
YES	46	92%
NO	4	8%

SWOT ANALYSIS OF INTERNET BANKING SERVICES PROVIDED BY SBI

Strengths:-

· Greater reach to customers

· Quicker time to market

· Ability to introduce new products and services quickly and successfully

· Ability to understand its customers’ needs

· Customers are given access to information easily across any location

· Greater customer loyalty

· Easy online application for all accounts, including personal loans and mortgage

· 24 hours account access

· Quality customer service with personal attention

Weaknesses:-

· Lack of awareness among the existing customers regarding internet banking

· Obsolesce of technology take place very soon specially in terms of security on internet.

· Procedure for applying for id and password for using services related to internet banking takes time.

· Lack of knowledge is found regarding internet banking in employees of SBI

· Implementation of newer technology is little bit complicated Employees needs training to obtain knowledge regarding I- banking

Opportunities:-

· Approximately 95% of customers are not using internet banking.

· Core competency can be achieved in terms of banking if focus is made on awareness of internet banking Can become 1st virtual bank of India.

· Concentration of various services should be made using internet banking Challenges

Threats:-

· Maintaining Business Edge over competitors in the context of sameness in IT infrastructure

· Multiple vendor support is necessary for working of highly complex technology

· Maintaining secured IT infrastructure for business operations

· Alternative must be there in case of failure of system

Conclusion

Studying the project we came to know that Internet banking is clearly the way forward for the State Bank of India. It provides comfort to customers at the same time it provides cost cutting to SBI by eliminating physical documentation. Internet banking saves time of bank as well as those of customers.

Study states that internet banking provides greater reach to customers. Feedback can be obtained easily as internet is virtual in nature. Customer loyalty can be gain. Personal attention can be given by bank to customer also quality service can be served. Bank should know that No system is perfect, however a system of such a type will need to be very secure. This is a system which holds account details and customers wealth. If such a system was not trusted and not reliable, then SBI would face serious laws and would lose business.

E-banking has become a necessary survival weapon and is fundamentally changing the banking industry worldwide. To day, the click of the mouse offers customers banking services at a much lower cost and also empowers them with unprecedented freedom in choosing vendors for their financial service needs. No country today has a choice-

whether to implement E-banking or not given the global and competitive nature of the economy. Banks have to upgrade and constantly think of new innovative customized packages and services to remain competitive. The invasion of banking by technology has created an information age and commoditization of banking services.

Banks have come to realize that survival in the new e-economy depends on delivering some or all of their banking services on the Internet while continuing to support their traditional infrastructure. The rise of E-banking is redefining business relationships and the most successful banks will be those that can truly strengthen their relationship with their customers. Without any doubt, the international scope of E banking provides new growth perspectives and Internet business is a catalyst for new technologies and new

business processes. With rapid advances in telecommunication systems and digital

technology, E-banking has become a strategic weapon for banks to remain profitable. It has been transformed beyond what anyone could have foreseen 25 years ago. However, banks are uncertain about the regulatory framework for conducting E-business and the regulatory and taxation issues for governing cyberspace presents formidable problems. Developing such a system is not easy as the Internet is not organized geographically and it is almost meaningless to refer to a website as national or local. Any successful attempt at governing cyberspace will involve significant international cooperation. Tax issues are being dealt with through O.E.C.D codes along with intergovernmental cooperation. The Indian experience of E-banking is gradually merging with its international counterparts. While the private sector and foreign banks have been fast in adopting Internet technology in client servicing, there is a gradual trend for the major public sectors and numerous cooperative units to move in the same direction. A mix of policy support and security assurance should propel further E-banking adoption in India.

Recommendations & Suggestions

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

1. Banks should obey the RBI norms and provide facilities as per the norms, which are not being followed by the banks. While the customer must be given the prompt services and the bank officer should not have any fear on mind to provide the facilities as per RBI norms to the units going sick.

2. Internet banking facility must be made available in all branches of these two Banks.

3. Each section of these Banks should be computerized even in rural areas also.

4. Personalized banking should be given a thrust as more and more banks are Achieving in usual services.

5. Covering up the towns in rural areas with ATMs so that the people in those areas can also avail better services.

6. Prompt dealing with permanent customers and speedy transactions without harassing the customers.

7. Fair dealing with the customers. More contributions from the employees of the bank. The staff should be co-operative, friendly and must be capable of understanding the problems of the customers.

8. Give proper training to customers for using I-banking

9. Create a trust in mind of customers towards security of their accounts

10. Make their sites more users friendly. Customers should be motivated to use I- banking facilities more.\

11. Training and awareness among employees:-

12. Exchange of information on threats and vulnerabilities at appropriate forums

13. Focus on identifying core competence

14. Increasing usage of mobile phones is going to revolutionize the banking culture in near future:-

15. More stress should be given on security concern on internet

APPENDIX

Questionnaire on “USES OF INTERNET BANKING SERVICES PROVIDED BY PUBLIC SECTOR BANK WITH SPECIFIC REFRENCE OF SBI”

Name: - ________________________________________

Phone no. : - ________________________________________

Occupation: - _______________________________________

1. Are you holding any bank account?

a) Yes b) No

If yes than which type of account you hold in bank?

A. Saving account B. Fixed account C. Current account

2. In which bank do you have your account?

a) ICICI c) HDFC

b) SBI d) PNB e) Other

3. Since how many years are you using this bank account?

a) Less than one year c) 1 to 5 years

b) 5 to 10 years d) 10 to 15 years e) Above 15 years

4. Are you availing E-banking services?

a) Yes b) No

5. Do you satisfy with the services provide by your bank?

a) Yes b) No

6. Which type of e-banking services you want to use?

a) Online funds Transfer b) Regular checking of bank statement.

c) Online purchase and payment. d) Other service

7. Do you like e banking services provide by SBI bank?

a) Yes b) No

8. Do you get timely feedback or response relating to your request or complain?

a) Always b) Sometimes c) Never

9. Tick the feature which you like while considering in your bank?

	Features
A.	Net Banking
B.	Credit Card Online
C.	Mobile Banking
D.	ATM
E.	Phone Banking

10. Which of the following factors influence you the most to use E-banking services?

	Factors	Strongly	More than average	Average	Less than Average	Not at all
A	All time availability
B	Ease of use
D	Security
E	Direct access