A Role of Technology in Banking

A Role of Technology in Banking By Raja Roy College Roll No :- BCFIN17336 Registration No :- KU1717451 University Roll No :- 1801605443810 Under the supervision of Dr. Aftab Alam Faculty of Commerce Karim City College, Jamshedpur-831001 2020 I

Karim City College Faculty of Commerce, Jamshedpur Certificate of Approval This Project entitled ―A Role of Technology in Banking‖ is hereby apporved as a creditable commerce study carried out and presented in a satisfactory manner to narrate its acceptance as prerequisite to the Degree for Bachelor of Commerce (B.Com Hons.) Which is being submitted. Project Supervisor External Examiner . II

Acknowledgement Working on this project entitled ―A Role of Technology in Banking‖ was a source of immense knowledge to me. I would like to express my sincere gratitude to my project supervisior Dr. Aftab Alam, for his guidence and valuable support, inspring discusiion and costant supervision throughout the course of this work. I am also thankful to my honoranle Priniciple Dr. mohammad Reyaz for his insiratation. I am also thankful to our H.O.D. Dr. Aftab Alam Ansari for his help during my project work. I acknowledge with a deep sence of gratitute, the encouragement and intrepretation received from our faculity members and colleagues. I would also like to thank my such a helpful parents and my friends for their love and support. Name :- Raja Roy Class Roll No :- BCFIN17336 Registration No :- KU1717451 University Roll No. :- 181605443810 . III

Table of Contents Acknowledgement………………………………………………………………………………….III Tables and Figures…………………………………………………………………………………IV 1 Introduction (1-8) 1.1 Background………………………………………………………………………………………..1 1.2 Purpose of the Study………………………………………………………………………………2 1.3 Main Objective of the study………………………………………………………………………2 1.4 New Technology………………………………………………………………………………….3 1.5 Strengthening security…………………………………………………………………………….3 1.6 Technology Trend in India Banking……………………………………………………………...4 2 Review of Literature (9-15) 2.1 Bank Committee Review…………………………………………………………………….……9 2.2 Customer service…………………………………………………………………………………11 2.3 Internet Banking in India…………………………………………………………………………12 2.4 Published Journal Review………………………………………………………………………..12 3 Profile of State Bank of India (SBI) (16-21) 3.1 SBI: Transformation from 1995 to 2020…………………………………………………………18 3.2 Application area of CBS…………………………………………………………………………20 3.3 Benefits of CBS………………………………………………………………………………….20 3.4 Product and services provided by SBI…………………………………………………………...21 4 Data Analysis and Interpretation (22-37) 4.1 Research Design…………………………………………………………………………………22 4.2 Primary Data Collection Method………………………………………………………………..22 4.3 Secondary Data Collection Method……………………………………………………………..22 4.4 Statistical Tools Used……………………………………………………………………………22 4.5 Data Analysis and Interpretation………………………………………………………………..23 5 Findings and Conclusion (38-40) Appendix (41-44) Reference 45 . IV

Table and Figure Pg. No. List of Table: 23 24 1.1 Since how many years do you have account with SBI bank. 25 1.2 Do you think bank caters all you're banking needs? 26 1.3 How many consumers are aware of product and services provided by SBI. 27 1.4 Which type of account consumer most prefer with this bank. 28 1.5 Which of the facilities have given more importance in SBI bank. 29 1.6 show how frequently ATM's used per month. 30 1.7 Show how frequently branch banking use per month. 31 1.8 Which bank consumer most prefer for online banking services. 32 1.9 What do you feel about Likert scale service quality of SBI bank. 33 1.10 Do you feel recommended this bank to your friends, relatives, associates. 34 1.11 Showing how frequently internet banking is used per month. 35 1.12 Why consumer are selecting online banking. 36 1.13 Would you use your mobile phone to do mobile banking. 37 1.14 Which of the following mobile banking features you like to use. 1.15 Have you ever visited bank branches after using online banking. Pg. No. List of Figures: 23 24 1.1 Since how many years do you have account with SBI bank. 25 1.2 Do you think bank caters all you're banking needs? 26 1.3 How many consumers are aware of product and services provided by SBI. 27 1.4 Which type of account consumer most prefer with this bank. 28 1.5 Which of the facilities have given more importance in SBI bank. 29 1.6 show how frequently ATM's used per month. 30 1.7 Show how frequently branch banking use per month. 31 1.8 Which bank consumer most prefer for online banking services. 32 1.9 What do you feel about Likert scale service quality of SBI bank. 33 1.10 Do you feel recommended this bank to your friends, relatives, associates. 34 1.11 Showing how frequently internet banking is used per month. 35 1.12 Why consumer are selecting online banking. 36 1.13 Would you use your mobile phone to do mobile banking. 37 1.14 Which of the following mobile banking features you like to use. 1.15 Have you ever visited bank branches after using online banking. .V

Executive Summary The purpose of this study is to examine the relationship between new technology implementation in banking sector and customers. How they are aware about the technologies and how they are using it. Data for this study was collected from the customers of State Bank of India under the Reserve Bank of India. A simple percentage analysis and pie chart will be done. According to questioners 30 samples are collected and interpretations are given, Findings suggest that most of the customers of bank using ATM facility. So the banks need to give awareness about the E-banking services. Lastly, the paper is of few papers that focus on technology development in banking industry. We briefly review the main trends that are affecting the global banking industry. underlining the effects of each of these changes on the risk profile of banks. For the past three decades India's banking system has several outstanding achievements to its 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 comers of the country. This is one of the main reason of India's growth process. Online Google Form Survey undertaken at SBI BANK aims to discover preference of various consumer awareness of the SBI BANK and the different product and services of SBI Bank. The general objective of the survey is to create and expand existing customer's base and to identify competition and also emboss SBI BANK in the minds Of Indian people. The methodology through which information has gathered is mainly ready to use customer's computerized database. The author of this report filled detailed report, being identified as strong potential market for SBI BANK and consumer awareness. The project report borings these finding and suggestion to capture still further area, SBI BANK can think of taking over. Keywords: - IT (Informative Technology), SBI (State Bank of India), ATM (Automatic Teller Machine) . VI

Chapter- 1 INTRODUCTION In recent times, Indian banking industry is consistently working towards implementing technological changes in the banking operations. Indian banks are continuously encouraging investment in information technology, i.e. ATMs, internet banking, mobile and tele-banking, computerization in banks, plastic money, establishment of call centres, etc. RBI has also adopted IT in endorsing the payment system‘s functionality and modernization on an ongoing basis through Electronic Clearing Services (ECS), Electronic Funds Transfer (EFT), Indian Financial Network (INFINET), Real-Time Gross Settlement (RTGS) System, Centralized Funds Management System (CFMS), Negotiated Dealing System (NDS), Structured Financial Messaging System (SFMS) and India Card. Consequently, Indian banking environment has become more compatible as compared to the standards of international financial system. This explosive growth in information technology has considerably changed the way in which commercial banks conduct business. In order to survive and adapt to the changing environment, the banks are putting more stress on understanding the drivers of success to generate superior financial performance. The impact of information technology on the performance of an organization is still a paradox. Hence, the present study makes an attempt to map the impact of IT on the performance of banking sector for scheduled commercial banks operating in India including public, private and foreign sector banks. 1.1 Background There is a long history of banking services in India. The history of banking is as old as human history. More particularly in the area of IT, where India has definitely an edge over its competitors, remaining away or uniformity of the world trends is untenable. Financial sector in general and banking industry in particular is the largest spender and beneficiary from IT. This endeavours to relate the international trends in it with the Indian banking industry. Today, most of the transactions can be done from the home and customers need not visit the bank branch for anything. Technology is no longer an enabler, but a business driver. The growth of the internet, mobiles and communication technology has added a different dimension to banking. IT enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products and services. Moving from a manual, scale-constrained environment to a global presence with automated systems and processes, it is difficult to envisage the adverse scenario; the sector was in the era before the reforms, when a simple deposit or withdrawal of cash would require a day. ATMs, mobile banking and online bill .- 1 -

payments Facilities to vendors and utility service providers have almost obviated the need for customers to visit a branch. Branches are also transforming from operating as transaction processing points into relationship management hubs. The change has been very productive for banks bringing in an increase in productivity and operational efficiency to be more competitive. With most of the banks being technology- enabled, the focus is shifting to computerizing regional rural banks (RRBs). In addition, banks are moving toward decision making and business intelligence software and trying to optimize the IT infrastructure created Better risk management due to centralization of information and real time availability of critical data for decision making. We need to anticipate where technology is going in today‗s rapidly changing environment and quickly adopt those solutions that best fit our industry and consumers. Customers have become accustomed to having technology at their fingertips, so we have to be more nimble in adopting and introducing emerging technologies. In commercial banking, for example, developments in portal technologies that offer enhanced data analysis and reporting are major areas of investment. Anticipating where the market is heading, how technology is evolving, and innovating ahead of our competition—both other banks and non-traditional competitors—while meeting growing security, regulatory and compliance requirements present challenges. Banks need to focus on a structure that is scalable yet nimble and able to support future growth and increasing needs of the business. At Capital One, we‗ve moved to an architecture that supports our ―always on‖ approach to enable our customers to bank whenever and wherever. We have to deliver with increased speed and efficiency while defining the role of big data and cloud computing in our solutions. Talent acquisition continues to be important. Candidates don‗t often think of a bank as a place for great IT talent – but banking is essentially an IT-lead industry and software development will become a huge need in banking. At Capital One, we have a huge appetite for the best technology minds. Banks need to show that they have the environment where tech talent will thrive and where they can get to work on the very best, latest technology. 1.2 Purpose of the Study The purpose of this study is to examine the relationship between new technology implementation in banking Sector and customers. How they are aware about the technologies and how they are using it. Which type of technology most of the times used by user/traders. The various type of challenges faced by banks in the changing scenario or changes in the technology. How they are providing to the customer best services or technologies, which types of trends in current time. 1.3 Main Objective of the study ➢ To study the role of technology in banks. ➢ To determine the technology in banks used by customers. ➢ To analyze the banking innovations after computerization of banks in India. ➢ To study the recent trends in Indian Indian Banking Industry. ➢ To highlight the various challenges faced by banks in the changing scenario. .- 2 -

1.4 New Technology The arrival of Payment banks and FinTechcompanies have made the existing banks to acquire new technologies, to work on totally new approaches to serve the customers and come out with innovations and new products supported by new processes retain their to customers. The last decade brought new technology solutions to the Indian banks through CBS, ATM Networks, Internet Banking, etc. recent times, banks. In many have implemented digital banking – POS, MPOS,Mobile/Tablet Apps, mobile wallets, social media to capture the valuable pie of the younger generation. Since September 2016, more than 51 bank have launched their UPI application, which enables a customer of any bank to make payments to a customer of any other bank, without demanding complete disclosure of account details of the remitter and beneficiary. The number of UPI transactions after domination has grown exponentially to 10 million transactions amounting to Rs 31,000 crores in June 2017 alone. The BHIM application launched by the Prime Minister on 30 December 2016, has been downloaded by over 16 million customers within a short me of months. Using BHIM a customer six ,can send, receive, collect money using virtual payment address (VPA), Account number + IFSC,Scan and Pay using QR code. In June 2017, there were more than 4.6 million transactions under BHIM among to Rs 14,867 crores across 49 banks. 1.5 Strengthening Security With increase in digital transactions, in recent times there has been a spurt in the number of incidents of organised gangs from few states coming cyber crimes by making calls, sending mails etc. to gullible ,customers to get the confidential details like card number, username, password, PIN, OTP, CVV, etc. This is causing concern to the banks and the regulator. To educate the public to do safe and secure banking, in Dec 2016, the IBA conducted week-long security awareness campaign through media – TV, FM, Print and Bill boards at public places and branches. The Reserve Bank of India has come out with guidelines for strengthening the cyber security of banks and banks are complying with the same. An SOC – security operations centre has been set up in every bank to monitor and improve the cybersecurity defence. Some banks have started using Artificial Intelligence for fraud prom for monitoring transactions through pa ern recognition, geographies etc. , .- 3 -

1.6 Technology Trend in Indian Banking Information and Communication Technology (ICT) has changed the functioning of banks worldwide. The foremost breakthrough started with the use of Advanced Ledger Posting Machines (ALPM) in 1980s. The enormous automation at branch level reduced errors which resulted in customers receiving error free services. In late 1980s Total Bank Automation (TBA) was introduced both for the front-end and back-end operations within the same branch followed by the establishment of mechanized cheque processing systems which used the Magnetic Ink Character Recognition (MICR) technology. Financial sector reforms and the emergence of internet facilitated banks in opting for centralized database for all their branches which resulted in low cost networks. New private sector banks and foreign banks employed ATMs, phone banking and internet banking pretty early followed enthusiastically by the public sector banks. Technology adoption helped banks in crafting their own web pages which customers can access through the web browsers from their homes/workplaces. This kicked off online banking way back in 1996, however, the usage rate increased subsequent to 1999 due to lower ISP online charges, increased PC penetration and technology stabilization (Shroff, 2004). Some of the important electronic delivery channels include the ATMs, debit/credit cards, mobile banking, and tele-banking where banking facilities are available on 24/7 basis across the world. Establishment of the INFINET in 1999 resulted in introduction of Real Time Gross Settlement (RTGS) system. Internet has thus ushered the concept of anytime - anywhere banking. It resulted in compliance with the core principles for systemically important payment systems of the Bank of International settlements (BIS), and has also provided the way for risk free, credit push-based fund transfers settled on a real time basis. Data warehousing is another development which effectively generates strategic information required by the management for continuous strategic decision making like branch expansion, product line expansion, market strengthening, credit risk assessment etc. The year 2006-07 witnessed the consolidation of IT based efforts by the financial sector in general and by the commercial banks in particular. The major developments during this year include the establishment of data centre‘s, a shift towards centralized systems and large scale implementation of core banking systems across bank branches. The Payment and Settlement Systems Act, 2007 (PSS Act) was also legislated in December 2007. Reserve Bank has since authorized payment system operators of pre- paid payment instruments, card schemes, cross-border in-bound money transfers, Automated Teller Machine (ATM) networks and centralized clearing arrangements. The payment system initiatives taken by the Reserve Bank of India have resulted in deeper acceptance and penetration of non-cash payment modes. The various new trends witnessed by banking sector are as follows: ❖ Electronic Payment Services: Now- a-days we witness some concepts like e- governance, e-mail, e-commerce, e-tail etc. In the same manner, a new technology is being developed in US for introduction of e-cheque, which will eventually replace the conventional paper cheque. India, as .- 4 -

harbinger to the introduction of e-cheque, the Negotiable Instruments Act has already been amended to include; Truncated cheque and E-cheque instruments. ❖ Real Time Gross Settlement (RTGS): Real Time Gross Settlement system was introduced in India since March 2004, through which electronics instructions can be given by banks to transfer funds from their account to the account of another bank. The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations. As the name suggests, funds transfer between banks takes place on a „Real Time‟ basis. Therefore, money can reach the beneficiary instantly. ❖ Electronic Funds Transfer (EFT): Electronic Funds Transfer (EFT) is a system whereby anyone who wants to make payment to another person/company etc. can approach his bank and make cash payment or give instructions/authorization to transfer funds directly from his own account to the bank account of the receiver/beneficiary. Complete details such as the receiver‘s name, bank account number, account type, bank name, city, branch name etc. should be furnished to the bank at the time of requesting for such transfers so that the amount reaches the beneficiaries‟ account correctly and faster. ❖ Electronic Clearing Service (ECS): Electronic Clearing Service is a retail payment system that can be used to make bulk payments/receipts of a similar nature especially where each individual payment is of a repetitive nature and of relatively smaller amount. This facility is meant for companies and government departments to make/receive large volumes of payments. ❖ Automatic Teller Machine (ATM): Automatic Teller Machine is the most popular device in India, which enables the customers to withdraw their money 24 hours a day 7 days a week. It is a device that allows customer who has an ATM card to perform routine banking transactions without interacting with a human teller. In addition to cash withdrawal, ATMs can be used for payment of utility bills, funds transfer between accounts, deposit of cheques and cash into accounts, balance enquiry etc. ❖ Mobile Banking: Mobile Banking Application is the latest of technologies used in the banking sector that is offered to the customers. A customer has to have a smart phone, tablet or Personal Digital Device (PDA). An application is developed which has to be compatible with Windows, Android, iOS and other mobile phone operating software. The Mobile application is downloaded straight to the mobile device. The customer has to have an active Internet connection be it mobile data or Wi-Fi that they will be able to use on the go to be able to utilise mobile banking service. The features offered are balance enquiry, view of a mini bank statement, funds transfer, checking of recent account activity, create and update standing order and direct debit payments, finding the nearest bank branch and ATM‘s and making payments. In order to use the service of mobile banking the customer has to be registered for internet banking service and they are given the choice of creating their own password and memorable information. Mobile banking is a service .- 5 -

that is offered free of charge. The customer has to register using an active mobile line. In addition a customer nowadays does not have to make a deposit physically in the bank they are able to take a picture of the cheque with their smartphone and are able to send the picture via mobile banking or deposit via the ATM. ❖ Internet Banking: One of the older technologies, where the aim of mobile banking was to go paperless. A customer accesses their bank account online by using and active Internet connection and is able to access the account balance enquiry, make payments, funds transfer, international money payments, create and update standing order and direct debit payments and check recent transactions. The customer accesses the website via a personal computer or laptop and the account information can be accessed from anywhere in the world. The following services can be accessed online; account balance enquiry, fund transfer among the accounts, create and update standing order and direct debit payments, remittance, account overview, account history, loan repayment, refill prepaid card and password change. ❖ Video Teller Machine (VTM): A new and innovative service available through the banks. A customer is remotely connected to the customer service representative via the VTM for all banking transactions. VTM offer all branch banking services to the customers. ❖ Near Sound Data Transfer (NSDT): It is a fast, secure and convenient contactless payment technology used in mobile banking that utilises any mobile phone. NSDT uses a onetime audio password that is issued every time a customer wishes to make payments to verify a transaction rather than using Secure SMS or USSD technologies. NSDT enables secure transactions on the Tag pay platform. NSDT transactions are executed through a customer's cellular and a dealer or operators' acceptance device for payment. A customer deposits money via a registered agent and the money goes into a virtual wallet. NSDT aims for all transactions are speed of Communication and data compression, security and cryptography, error detection and correction and lastly sound optimization and performance. Therefore, NSDT makes effective and excellent transactions, and can even be used in very noisy environments. ❖ RFID Technology: A bank card is embedded with a chip made for payment. Payment is made is simply made by placing the card in front of an RFID reader, and the payment is processed automatically. ❖ Telephone Banking or Interactive Voice Response (IVR): A customer has to register for the telephone banking service through the bank. Telephone Banking is an IT that allows a customer to interact with the system once they place a call to a dedicated number provided by the bank. A customer interacts by selecting various options from a voice prompt system or can also speak to select options. The customer is to select the most applicable option when prompted to by the pre- recorded voice on the designated number for telephone banking. Voice prompt system utilises speech recognition which interprets the customer's voice. The customer must use simple words such as \"yes\", \"no\", or a number to select an option. Telephone Banking proves to be expensive as the customer has to make calls. .- 6 -

❖ Contactless Payments using Near Field Technology (NFC): It is a two-way radio waves communication, as well as mobile contactless and wireless form of payment using smart mobile devices which run compatible software and are also touched together within close proximity of each other. NFC is a short-range, high-frequency technology, which allows an exchange of information between devices within 10 cm. NFC was built upon the RFID technology. Allowing wireless communication and data exchange between devices. A device is either active or passive modes. Encryption is used to secure sensitive data, antivirus and phone lock must be used to secure the phone in case it‘s lost or stolen. As stated in the NFC website NFC technology is mostly popular in Europe, America and Asia. NFC aim is to keep the queues short, faster times for transactions to be processed, less cards to carry around as one just has to remember to carry their mobile device for payment. ❖ Mobile Money: Also referred to as mobile wallet, mobile payment and mobile money transfer. Mobile money service is used worldwide, mainly used in Africa for those with or without bank accounts. The service is provided by the mobile network operators who are in partnership with the commercial banks. The mobile money accounts can also be linked with a customer‘s bank account. The mobile money service is another way of banking money, without the hassle of opening a bank account. The money in the virtual ―wallet‖ can be used to pay for anything for example buying of mobile credit, payment of bills, goods and services rendered. A PIN number is used to verify the transactions made. The service is at a cost to both the sender and receiver. Mobile Money customers have a virtual wallet where there funds are kept, they deposit, make payments and withdraw from funds. ❖ Aadhaar-Based Payments:- The introduction of Aadhaar card and Aadhaar authencationis through UIDAI has been a game changer in the Indian banking technology in the last one year. The E-KYC has made it easy for the customers and banks to open accounts, meeting the KYC requirements. The Aadhaar authencation has brought in a new payment system – AEPS and subsequently the BHIM Aadhaar – a digital PoS system, which only requires a smartphone with a biometric device for the merchant and does not require even a phone from the customer. This increases the reach of digital payments to the masses. While BHIM is an extension of the UPI applications of the banks, BHIM Aadhaar is an extension of AEPS. BHIM Aadhaar is the common mobile, introduced by National Payments Corporation of India (NPCI), for any merchant associated with any acquiring bank on BHIM Aadhaar Pay service, to allow the merchant to accept payment from a customer of any bank, by attenuating the customer's biometrics – currently only fingerprints, directly from customer s bank ‘account and receive the sale proceeds instantaneously directly into merchant s own bank ‘account. The BHIM Aadhaar was launched by the Prime Minister on 14 April 2017 and banks have on- the boarded thousands of merchants under BHIM Aadhaar. Aer detailed discussions with banks and NPCI on security aspects, UIDAI had come out with stringent security standards for the biometric devices to be used with BHIM Aadhaar application With availability of these devices improving, there will be a tremendous growth in deployment of BHIM Aadhaar with merchants, especially in RUSU areas. While Aadhaar has enabled the DBT system helping the GoI to save thousands of crores by plugging loopholes and eliminating subsidies in welfare schemes, the new notification under PMLA requiring all accounts to be linked with Aadhaar will further strengthen GoI in its drive against black money. The increased use of Aadhaar authencationis will help the banks in improving operational risk management in opening of accounts and transaction payments. .- 7 -

 QR Code to Enhance Quantitate Reach out:- In recent times, payments industry in India has seen a surge in QR Code based payments solution being implemented by many banks and third party technology providers for their own Wallets‖. A QR ―based payment solution represents a new channel initiating and accepting payments between buyer sand sellers (or consumers and merchants) using the mobile phone. This is one technology which can be easily used to expand electronic payments for millions of small retail merchants who, do not have the options to undertake a traditional POS with card swipe EDC terminals. The Reserve Bank of India, had advised few authorised card networks in the country, desirous of implementing QR Code based card payment solutions, to put in place common interoperable solution for such QR Code. Accordingly, the authorised card networks namely VISA, MasterCard, American Express and NPCI worked jointly with banks to formulate common standards for QR Codes to be placed at merchants establishments and / or e- ‘commerce/m-commerce websites. The Bharat QR Code was launched by Shri Gandhi, Deputy R.Governor of RBI on 20 Feb 2017. The Bharat QR code functions as a digital POS and does not require any physical POS infrastructure. The advantage of ―Bharat QR‖ code is that merchants and customers need to deal with one standard logo, which will be displayed at the merchant eliminating the requirement of multiple QR codes for different cards and banks. It is a COMMON QR code across banks and network cards. The customer of any bank can download the QR application from his bank and first me link his debit/credit card/prepaid card. Using the application on his smartphone, the customer will scan the Bharat QR code with the merchant; enter the amount, authencationis and Pay. The QR code will contain the beneficiary details, merchant code and the payment will directly go to the account maintained by the merchant with his bank. The payment notification will be sent to both the merchant and the customer immediately. Customer need not disclose the details of his card to the merchant, guarding him from skimming frauds. In case of online purchases, the QR code will be pre-populated by the amount also. .- 8 -

Chapter-2 LITERATURE REVIEW Worldwide, in the last few years, a role of technology has been done in the banking sector and its impact on performance is still a paradox. Numerous studies, using alternative methodologies, have been done on different country banking systems. Following section is a synoptic view of some representative banking sector related studies 2.1 Bank Committee Review N. Ravichandran (Professor, IIMA) (2003), The Indian banking sector is going through major changes as a consequence of economic reforms. The changes affect the ownership pattern of banks, availability of funds, the cost of funds as well as opportunities to earn, range of services (fee based and fund based), and management of priority sector lending. The new rules of competition require recognition of the importance of consumers and the necessity to address the needs through the innovative products supported by new technology. As a consequence of competition, the managerial challenges include market segmentation, product positioning, innovative delivery channels and cross selling. The banks may have to reorient their resources in the form of reorganized branch networks, reduced manpower, dramatic reduction in establishment cost, honing the skills of the staff, and innovative ways of attracting talented managerial pool. The Government of India and Reserve Bank of India on their part, would strengthen the existing norms in terms of governing and directing the functioning of these banks. K V Kamath (MD and CEO, ICICI Bank) (2003), The biggest opportunity for the Indian banking system today is the Indian consumer. Demographic shifts in terms of income levels and cultural shifts in terms of lifestyle aspirations are changing the profile of the Indian consumer. This is and will be a key driver of economic growth going forward. The Indian banking sector is at an exciting point in its evolution. The opportunities are immense – to enter new businesses and new markets, to develop new ways of working, to improve efficiency, and to deliver higher levels of customer service. S S Kohli (CMD, Punjab National Bank) (2003), with gradual deregulations, banks are now exposed to different types of risks. In view of the dynamic nature of the financial market, banks face various market risks like interest rate risk, liquidity risk, exchange risk, etc. In respect of lending, they face credit risk which includes default risk and portfolio risk. Besides, banks also face other risks like reputational risk and operational risk. Therefore, a robust risk management system is necessary. As the Indian banks move gradually beyond universal banking and position themselves as financial service providers, banking business is getting redefined. Technology is unsettling the earlier business process and the customer‘s behaviour is undergoing a change. These have enhanced the forces of competition. To survive under these conditions, the public sector banks will have to undertake business process reengineering, redefine their strategy and HR strategies to the overall business strategy. The technology will become a key driver of a financial business. .- 9 -

Gotlieb, and Denny [1993], is one of the studies that deals with the impact of IT on banking productivity per se. Computerisation is one of the factors which improves the Information efficiency of the banking transactions. They concluded that higher performance levels have been achieved without corresponding increase in the number of employees. Also, it has been possible for Public Sector Banks and Old Private Banks to improve their productivity and efficiency by using IT. Dr. Rangarajan committee had drawn up in 1983-84 the first blue print for computerisation and mechanisation in banking industry and looked into modalities of drawing up a phased plan for mechanisation for the banking industry covering period 1985-89. The committee in its report in 1984 recommended introduction of computerisation and mechanisation at branch, regional office / zonal office and head office levels of banks. In 1988 another committee was constituted under the chairmanship of Dr. Rangarajan for making plans for computerisation for the next five years from 1990-94 for the banking industry. It identified the purpose of computerisation as improvement in customer service, decision making, house keeping and profitability. The committee observed that banking is a service industry and improved efficiency will lead to a faster rate of growth in output and help to expand employment all around. The work force in the banking industry must, therefore, look upon computerisation as a means to improve customer service and must welcome it in that spirit. W.S. Saraf Committee (1994), the Governor, Reserve bank of India had appointed a committee on technology issues under the chairmanship of W. S. Saraf. The committee looked into technological issues related to the payment system and to make recommendations for widening the use of modern technology in the banking industry. The Saraf committee recommended to set up institutions for electronic funds transfer system in India. The committee also reviewed the telecommunication system like use of BANKNET and optimum utilization of SWIFT by the banks in India. Shere Committee (1995), RBI formed a committee under the chairmanship of K. S. Shere, to study all aspects relating to electronic funds transfer and propose appropriate legislation. The Shere committee had recommended framing of RBI (EFT system) regulations under section 58 of the Reserve bank of India Act 1934 (RBI Act.), amendments to the RBI act and to the bankers book evidence act, 1891 as short term measures and enacting of a few new acts such as EFT act, the computer misuse and data protection act etc. as long term measures. Narasimhan Committee (1998), In order to examine the various issues related to the technology up- gradation in the banking sector, the Reserve Bank of India appointed Narasimhan committee in September 1998. The committee consists of representatives from the Government, Reserve Bank of India, banks and academic institutions associated with the information technology. The committee dealt with the issues on technology upgradation and observed that the most of the technology that could be considered suitable for India in some form or the other has been introduced in some diluted form or as a pilot project, but the desired success has not been achieved because of the reasons inter-alia lack of clarity and certainty on legal issues. The committee also suggested implementation of the necessary legislative changes, keeping in the view the recommendations of Shere committee. The need for addressing the following issues was also emphasised:- ● Encryption on Public Switching Telephone Network (PSTN) lines ● Admission of electronic files as evidence ● Treating Electronic Funds Transfers on par with crossed cheques / drafts for purposes of Income Tax etc. -.10 -

● Electronic Record keeping ● Provide data protection ● Implementation of digital signatures ● Clarification on payment finality in case of EFT Taking into consideration the recommendations by various committees appointed by RBI and guidelines of RBI, banks have started using IT to automate banking transactions and processes. 2.2 Customer service Mishra A. K.(2006), examined the reasons for the satisfaction of the customers with the services rendered by the Urban Cooperative Banks. The author described that, urban cooperative banks are operating in a more competitive environment and therefore, the need to take care of customer requirements has become more important. The branches of UCBs must cater to the betterment of the customers. They should also improvise on their own image, customer satisfaction and their profits. The time norms for specific business transactions should be displayed prominently in the banking hall so that it attracts the customers‘ attention. In the ultimate analysis, what is necessary for improving customer services is the active participation of employees at all levels in the bank functions. The author also raised some points which can be a plus point for UCBs to impress & attract their customers. These points are: effective board of management, efficient employees/staff, cordial personalised services, proper guidance, provision of loan facilities, good systems, computer systems, prompt services, good work culture, convenient timings, proper clearing services for outstation cheques and demand drafts, split hour facilities, Sunday working day, discounting facilities for outstation cheques, and good location of the bank. Uppal R. K. (2008), described that in the post-LPG (Liberalization, Privatization and Globalization) era and Information Technology (IT) era, transformation in Indian banks is taking place with different parameters and the curves of banking services are dynamically altering the face of banking, as banks are stepping towards e-banking from traditional banking. The paper empirically analyzes the quality of e-banking services in the changing environment. With different statistical tools such as weighted average method and ranking, the paper concludes that most of the customers of e-banks are satisfied with the different e-channels and their services, but the lack of awareness is a major obstacle in the spread of e-banking services. The paper also suggests some measures to make e-banking services more effective in the future. Sakalya Venkata et.al. (2010), analyzed the factors that affect the choice of customers in choosing the retail banks by the customers. In the study, the authors have tried to identify various factors and also analyzed as to which of these factors exert the greatest, moderate and relatively lower influence as choice criteria. It is an attempt to study the consumer behaviour with respect to the people‘s choice of retail banks. Efforts are made to dwell deep in the psychology by talking to the customers surveyed, wherever possible. The 15 different factors that could be identified, approximately in the order of their importance, are (1) Safety of Deposits, (2) Size and Strength, (3) Accuracy, (4) General Service Quality, (5) Speed of Delivery, (6) Proximity, (7) Security of Environment, (8) Cordiality of Staff, (9) Price and Service Charges, (10) Product Packaging, (11) General Public Impression, (12) Peer Group Impression, (13) Face Lift (Structural), (14) Friendship with Staff and (15) Advertisement and Publicity. According to the findings, based on the empirical study, the first six factors exert the greatest influence, next four have moderate importance, and the rest five have relatively lower influence. Thus, retail banks must reorganize their activities to achieve their corporate mission through customer orientation. In the competitive and -.11 -

capitalistic markets consumer is sovereign and therefore the bankers must reengineer their view and recognize the predilection and tang of the retail customers. 2.3 Internet Banking in India Jadhav Anil (2004), described various channels of e-banking services such as ATM, Telephone banking (Tele-banking), Mobile banking, Internet banking and its features. The focus is also given on e- banking opportunities, challenges and security aspects while performing the banking transactions on the internet. Comparison of public, private, foreign and co-operative banks and barriers to the growth of e- banking in India are also discussed. Finally the paper discusses an overview of the major private sector banks such as ICICI, HDFC, IDBI, UTI & GTB banks which provides e-banking services. Mishra A. K. [25] described that the Internet banking is a cost-effective delivery channel for financial institutions. The author also describes the advantages of internet banking, current status of internet banking in India, and the mechanism to protect the customer‘s data. The advantages of internet banking are: • To improve customer access • To facilitate more services • To increase customer loyalty • To attract new customers • To provide services offered by competitors • To reduce customer attrition Current status of internet banking is: • Throughout the country, the Internet Banking is in the emerging stage of development • In general, these Internet sites offer only the most basic services. 55% are so called 'entry level' sites, offering little more than company information and basic marketing materials. Only 8% offer 'advanced transactions' such as online funds transfer, transactions & cash management services. • Foreign & Private banks are much advanced in terms of the number of sites & their level of development. 2.4 Published Journal Review Klinkerman (2000), Facing extremely intensive competition from non-banking sector, the banking industry has adopted a more aggressive approach to fight competitors for the financial services market share. For example, a number of banks, especially some community banks, decided to provide Internet access to their customers and becoming the dominant provider of local Internet connection services for the local community, thus hoping to lock in customers to their financial institution. Avasthi & Sharma (2001), have analyzed in their study that advances in technology are set to change the face of banking business. Technology has transformed the delivery channels by banks in retail banking. It has also impacted the markets of banks. The study also explored the challenges that banking industry and its regulator face. Arora (2003), highlighted the significance of bank transformation. Technology has a definitive role in facilitating transactions in the banking sector and the impact of technology implementation has resulted in the introduction of new products and services by various banks in India. -.12 -

Aggarwal (2003), in his paper , hunted for such avenues wherever e-banking may play important role in e-democracy. The author mentioned 2 case studies on the implementation of e-banking in digital democracy. One was farmer service and different was e-seva. Whereas applying e-banking in e- democracy, services become safer, efficient, clear and quick. It becomes a win-win state of affairs for all, for banks its low price, for presidency its higher service, for business it's quick and secure and for voters it‘s clear and economical. The author evaluated that e-banking night be used for thriving e-banking for online bill payment, online brokerage, online account management, anyplace banking, etc. The author terminated that e-banking services give one stop service and informational unit that gives nice advantages to banks, customers, employers and government. Arora (2003), created an effort to prove that technology had a definitive role in facilitating transactions within the banking sectors; and also the impact of technology had resulted into the introduction of recent product and services and varied banks in Asian nation. The author mentioned varied initiatives taken by the banks to manage transformation and these initiatives had brought customers the convenience of anyplace, anytime banking. The author ended that technology was a helper for advancement within the core business of banking and not an finish in itself. Vij Madhu (2003), presents the changing profile of Indian banks with the help of a comparative study of three private sector banks in India namely ICICI bank, HDFC bank and IDBI bank. The comparative analysis of the three private sector banks shows that HDFC stands out as a clear winner with ICICI at number two. In the study the researcher concludes that the challenge for the future will be the synergetic use of internet, proper understanding, measuring of risk management as also nurturing and retaining the intellectual capital. The author suggested the following strategies that need to be focused on: ● Develop and innovate new products so as to widen customer base. developed ● Strategic alliances. ● Setting up of an effective software system for ALPM the way banks in most of the countries are using. This study is limited only to 3 private sector banks. This paper do not present any information related to the problems of bank computerisation and future of the computerised banks. Rajshekhara K. S. (2004), described the adoption of IT in banking has undergone several changes with the passage of time. Today IT has become an inseparable segment of banking organization. The application of IT in the banking sector resulted in the development of different concepts of banking such as – E-banking, Internet Banking, Online Banking, Telephone Banking, Automated teller machine, universal banking and investment banking etc. IT has a lot of influence on banking transactions. It ensures quick service with low transaction cost to the customers. The real success of IT in the banking sector depends upon the customer‘s satisfaction. Therefore banks should organize and conduct customer awareness program in their service area. Security is an important issue in the context of E-banking. The development of technology for the identification of customers with different means of communication devices is a must for successful business and also to reduce frauds in banking. In this paper the author has studied customer related aspects only. This paper do not present any study related to the bank employees and their problems regarding bank computerisation. Gulati V. P.(2004), listed the following possible applications that can be easily complimented by the Indian financial sector. ● Quick disposal of loan/investment proposal -.13 -

● Forex information from branches to the office dealing with forex ● Fund information from clearing centers to the fund management office for optimal allocation of funds ● Inter-branch inter bank reconciliation ● Fund transfer/payment messages (EFT/EDI) (intra-bank and inter-bank) ● E-mail ● Organisational bulletin boards may contain the following: circulars, undesirable parties, hot list, bulletins, missing security items, confidential circulars on attempted frauds ● Organisational/customers database may include statutory returns, control returns, standardised returns, adhoc reports ● Banks-corporate customers connectivity ● Management information systems: Borrower‘s profile; Branch profile; employee‘s analysis; products/services profile; business profile of branches ● Banks owned ATM/credit-debit card and other applications on the financial network Ashiya (2006), evaluated developments created by economic electronic payments. The authors evaluated completely different modes of e-payment used across the world. The most Objective of the study was to seek out the present offerings and development provided by electronic payments. The author evaluated completely different modes of e-payment like plastic cards, debit cards, credit cards sensible cards, electronic cheques etc. These elec6wqys in which provided a wonderful instrument fro payment system. The author analyzed that security was the most concern among electronic payments. However, e- payments this subtle technology may be used as a tool for the improvement of client loyalty and business of banks because it had reduced the danger & value and will increase the client loyalty. Shetty (2006), in his study found that globalization in banking is based on four important pillars viz. trade in goods and services; flow of capital and movement of human beings across boundaries; harmonization of regulatory framework in different countries; and developments in technology, particularly those in IT. Hogarth and Hilbert (2004), highlighted that electronic banking technology represents a spread of various services, starting from common ATM services and direct deposit to automatic bill payment (ABP), Electronic Transfer of Funds (EFT) and pc banking (PC banking). The utilization of e-banking technologies had grownup chop-chop within the USA, whereas others are adopting it slowly. The authors explored such factors that have an effect on the adoption to adopt 3 e-banking technologies and changes in these factors over time. They advised that e-banking technologies couldn‘t be aggregate into one class, and thus, ― one size fits all‖ wouldn‘t work. The utilization of e-banking depends upon however it helps in saving time decrease the errors, up inaccurate accounting and preventing in manipulation of information. Laforet and Li (2005), in their study investigated the market standing of online / mobile banking in china. The target of the study was spot the target customers for online and mobile banking and to match the angle of users and non-users towards e- banking with relevance variety of things like technology, security, convenience, etc. The authors selected a sample of three hundred respondents from six major cities of China. The results showed that online and mobile banking users were preponderantly males not essentially young and extremely educated. Security was the foremost vital issue that driven Chinese shopper for the adoption of on line banking. However that most issue baby-faced by the shopper of Chinese banks in on-line banking were perception of risks, laptop & technological skills, and lack of awareness. -.14 -

Jain and bindal (2006), represented the importance of mobile banking and barriers within the adoption of mobile banking. The paper examined the forces which mobile banking. The paper examined the forces which will act as barriers in mobile banking services adoption. The target of the study was to seek out the explanation why the floks had not absolutely accepted the technology tho it provided abundant advantage to the banking customer as compared to previous technologies. The paper tried to spot the varied barriers, viz. Access issues, discontentedness and inability of services suppliers within the adoption of mobile banking services. The results of the study indicates that buyers got demoralized by the difficult perform whereas accessing the mobile banking services that cause rise in their discontentedness level, as no correct steerage was provided to them. The researchers instructed that service suppliers ought to bear in mind of the issues of their customers. The findings of the study gave a quick outlook for the sensible implication for managers and privacy makers United Nations agency have to be compelled to create ways and choices so as to cater the undiscovered services market. -.15 -

CHAPTER-3 PROFILE OF STATE BANK OF INDIA(SBI) Roots of State Bank of India can be found from the first decade of 19th century with the establishment of Bank of Calcutta in Calcutta on June 2nd, 1806. Three years later, this bank was renamed as Bank of Bengal on January 2nd, 1809. British India established this bank as their first ever joint stock bank under the sponsorship of Government of Bengal. Subsequently Bank of Bombay and Bank of Madras were also established on July 1st,1840 and July 1st ,1843 followed by Bank of Bengal. Modern banking scenario in India was dominated by these three banks until they were later merged to form the Imperial Bank of India on January 27, 1921. The Presidency Banks Act, which came into operation on May 1st, 1876, brought the three presidency banks under a common statute and the banks involved themselves in the financing of practically every trading, manufacturing and mining activity in the sub-continent.. These three banks have the exclusive right to issue paper currency notes till the Paper Currency Act was passed in 1861. This right was abolished as Government of India got the sole power of issuing currency from March 1st, 1862. The Presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged on 27th January, 1921 to form the Imperial Bank of India (Gupta R.P, 1994). The main purpose of Imperial bank is to do commercial banking, bankers‟ to banks, and banker to the government. But this creation was preceded by years of deliberations on the need for a 'SBI'. What eventually emerged was a 'half-way house' combining the functions of a commercial bank and a quasi-central bank (www.sbi.co.in , 2012). The birth of Reserve Bank of India in 1935 as the central bank to the government reduced the central role of Imperial Bank. The birth of Reserve Bank simultaneously saw important amendments being made to the constitution of Imperial Bank, converting it into a purely commercial bank. When India attained freedom, Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country (www.sbi.co.in , 2012). The launch of first five year plan was an important turning point emerged for SBI with primary focus on development of rural sector. Till the first five year plan, the commercial banks of the country, including the Imperial Bank of India, restricted their products and services to the urban sector. Therefore, in order to reduce this limitation and serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored -.16 -

bank by taking over the Imperial Bank of India, and incorporated with it, the former state-owned or state- associate banks (www.statebankofindia.com , 2012). In May 1955, an act was passed and on July 1st, 1955 SBI was created. More than 25% of the available resources by the Indian banking system was directly controlled by this newly established bank namely SBI. Later in 1959, SBI (subsidiary bank) act was passed, which enables this bank to take over eight former state associated banks as its subsidiaries. Later these subsidiaries were named as SBI associate banks. Thus, it can be said that SBI was born with a special purpose assisted by 480 offices that includes branches, sub-offices and three local offices that were inherited by Imperial Bank. This bank caters to the needs of customers by banking purposefully instead of restricting the service to mere repositories of the community‟s saving and lending to the creditworthy parties. The seven banking subsidiaries before merger and absorption are: 1. State Bank of Bikaner and Jaipur (SBBJ) 2. State Bank of Hyderabad (SBH) 3. State Bank of Indore (SBIR) 4. State Bank of Mysore (SBM) 5. State Bank of Patiala (SSBM 6. State Bank of Saurashtra (SBS) 7. State Bank of Travancore (SBT) In 2008, State Bank of Saurashtra was merged with SBI. Then in 2009, SBI‟s board approved the absorption of State Bank of Indore (www.Wikipedia.org , 2012), reducing the number of associates to only five. SBI at present has following five Associate Banks . 1. State Bank of Bikaner and Jaipur (SBBJ) with State Bank holding of 75.07 %. 2. StateState Bank of Hyderabad (SBH) with State Bank holding of 100%. 3. State Bank of Mysore (SBM) with State Bank holding of 92.33 %. 4. State Bank of Patiala (SBP) with State Bank holding of 100 %. 5. State Bank of Travancore (SBT) with State Bank holding of 75.01%. SBI, a bank with 60% government stake, was India‟s largest commercial bank and the 43rd largest bank in the world with a market capitalization of over $36.5 billion in 2011(Lal, R. and Tahilyani ,R. 2011). -.17 -

3.1 SBI: Transformation From 1955 to 2020 Some of the important events that took place in the history of SBI: On September 1955, SBI (Subsidiary Bank) act was passed and in October 1955, State Bank of Hyderabad became the first subsidiary of SBI. In 1960, State Bank of Jaipur, State Bank of Bikaner, State Bank of Indore , State Bank of Travancore, State Bank of Mysore, State Bank of Patiala and State Bank of Saurashtra became subsidiaries to SBI. In October 1963, a branch of SBI in London city became banker to Indian High Commission. Earlier, this was done by the office of Reserve Bank of India. Bank of Behar Ltd. was merged with SBI in November 1969.To meet the needs of corporate sector, a merchant banking division was set up in the central office in the year 1972. During the year 1977, SBI introduced the perennial Pension Plan Scheme through which customers can claim monthly pensions with certain conditions. Further, in order to meet the social and cultural needs of villages, the SBI launched an integrated rural development programme aimed at housing and social activities apart from credit needs of agriculturist and agricultural needs and village industries. The Non- Resident Investment Cell was setup in the year 1982, which streamlined the working operations of the non-resident investment sections at important centres. In the year 1983, SBI took the initiative of providing self-employment opportunities for the educated unemployed youths. These youths were encouraged to undertake self-employment ventures in industries, service and business. The Bank of Cochin Ltd. with 108 branches was merged with State Bank of India in the year 1985. In addition to that, a data bank was setup of sick units available to be taken over by healthy units. In the same year, all the share of Imperial Bank of India was vested in Reserve Bank of India. State Bank of India was registered with an authorised capital of Rupees 20 Crores. Every person who owned the share of Imperial Bank of India on June 30th , 1955 was paid by Reserve Bank of India. State Bank of India in the year 1987, had sponsored 30 Regional Rural Banks that covered backwards and unbanked district in the country. During the year 1988, State Bank of India initiated UPTECH,an Industrial Technology Group to direct and guide programs that aimed at facilitating up-gradation in technology. Further, three pilot programs schemes were launched to develop entrepreneurship among women under the name ―Stree Shakti‖ in the district of Chennai, Calcutta and Hyderabad. On 20th September, bank inaugurated ―SBINET‖, an integrated communication project that aimed at improving customer service, operation efficiency and administrative convenience. With this network bank can handle voice, fax data and manages through the trunk routes and exchanges in important centres. In the same year, the bank sponsored 30 Regional Rural Banks (RRB‟s) covering 66 divisions in the country. In addition to that, 76 branches were opened that raised the total tally of branches to 2306. In the year 1990, State Bank of India introduced agricultural credit cards known as SBI Green Card to give farmers more liquidity and flexibility in procuring agricultural inputs. This pilot scheme was introduced in 125 intensive centre branches. During the year 1992, bank sponsored 30 RRB‟s with a -.18 -

network of 3189 offices that covers 102 backward and unbanked districts of the country. Moreover, during the same period NRI branches were opened that were equipped with latest technology at Mumbai and Delhi to cater to the special needs of NRI residents. Representative office at Tashkent as part of its overseas expansion was established in 1993. In 1997, State Bank of India became the first public sector bank to introduce optical disc facilities for data storage. During the year 1998, on January 27, bank started its foray into the payment cards business in a joint venture agreement with General Electrical Capital Corporation ( GE Capital) . During the same year, State Bank of India signed an agreement with Visa International for cards in the country. State Bank of India tied up with its associates to market its cards. SBI tied up with State Bank of Patiala and State Bank of Mysore to help market its credit cards in the year 1999. Value added services were also introduced by SBI to its customers like credit cards can be used at ATM‟s as an ATM card. During the year 2000, State Bank of India Bank had focused upon the expansion of ATM network in the twin cities of Hyderabad and Secunderabad. Further, the bank cleared the setting up of separate subsidiary for information technology. SBI tied up with State Bank of Mysore to launch co-branded credit cards to expand its card holder base. In the same year, SBI launched an international credit card only for doctors, first of its kind in the country. During the year 2001, State Bank of India expanded its network of ATM‟s in North East , in Bangalore and in Mumbai . In addition to that, HCL Com Net was assigned the task to provide it ATM teller inter-connectivity during the same year. On July 3, SBI launched SBI International Card and SBI Global Card for global travellers. These cards would be accepted at over 20 million Visa outlets all over the world and one lakh outlets in the country. Huge investment of Rupees 800 crores was invested in technology up-gradation program and appointed KPMG, a consultant in computer technology, to provide inter-connectivity to computerised branches and also to the ATM‟s all over the country, enabling its customers to indulge in any kind of transaction from anywhere. During the year 2002, State Bank of India introduced the up-gradation plan with KPMG help. Two new credit card schemes were launched namely SBI Advantage Card to banks fixed deposits customers and SBI International Cards for its home loan customers. In a big step, moving towards becoming a market leader, State Bank of India introduced a new card, SBI cash plus its Maestro Debit card. This card allows its customers to access their account from ATM‟s and merchant establishment. Two new cards were launched by SBI namely SBI Bangalore Card and Hyderabad Card. For providing network solutions, MRO-TEK had secured orders from SBI to connect more than 800 branches all over the country. State Bank of India tied up with two private banks for sharing ATM networks namely ICICI bank and HDFC bank. In 2004, SBI initiated a concept of drive-in ATM in Hyderabad city. ATM sharing agreements with UTI and Andhra bank was agreed upon by SBI. A new prepaid card was introduced by SBI namely, Vishwa Yatra foreign travel card, which offers the traveller a convenient and secure way to carry cash. During the same, year SBI launched fully computerised branch at Karunagappally in Kollam district. First mobile ATM for -.19 -

increasing banking convenience of its customers was launched . A new scheme specially for credit card users was launched namely „Instant card‟ which customers can use within few hours of filling their application form. In year 2005, SBI and all its 8 subsidiaries have entered into agreement with Bharat Petroleum Corporation Ltd (BPCL) for enhancing the usage of card at fuel stations. During the same year, SBI enters into agreement with Punjab National Bank (PNB) and Corporation Bank for ATM sharing. In the year 2007, number of debit card users of State Bank of India crossed over 70 million comprising of SBI Cash Plus, SBI Gold Debit and SBI Yuva Card. SBI added the concept of chip and PIN- based with Platinum Debit card. SBI also entered into pact with Unique Identification Authority of India (UIDAI) during the same year. It became the first bank to take up registration work for UIDAI project. During the year 2012, State Bank of India launched virtual debit card to check online fraud and to promote more and more e-commerce transactions. 3.2 The application areas of Core Banking Solutions (CBS) Computer software is developed to perform day to day operation of banks like: 1. Balance of payments and withdrawal 2. Recording of transactions 3. Passbook maintenance 4. Interest calculations on loans and deposits 5. Customer records 6. ATM‟s 7. Internet Banking 8. Mobile banking 3.3 Benefits of Core banking Systems The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. For example, the new core banking system allowed the bank to redesign processes. It established 400 regional processing centres for all metro and urban branches that assumed functions -.20 -

previously performed in the individual branches. The bank recently reported that business per employee increased by 250% over the last five years (Hunt, R. 2009). 1. To meet the intense competition and changing market dynamics in an over banked environment. 2. To meet the regulations and compliance requirements like Information Technology infrastructure. 3. To meet the demands of customers who are better informed, more demanding and less loyal than ever. 4. To enhance efficiency and effectiveness. 5. Increasing customer satisfaction and convenience 6. Freeing up time for branch staff to focus on sales and marketing 7. Simplifying process for employees. 8. Enhancing bank‟s competitiveness in the market 9. Improved process efficiency 3.4 Product and Services by State Bank of India Various personal banking products offered to the customers by State Bank of India are: • State Bank of India Term Deposits • SBI Loan For Pensioners • State Bank of India Recurring Deposits • Loan Against Mortgage Of Property • State Bank of India Housing Loan • Loan Against Shares and Debentures • State Bank of India Car Loan • Rent Plus Scheme • State Bank of India Educational Loan • Medi-Plus Scheme Other Services by State bank of India: 1. Agriculture/Rural Banking 2. NRI Services 3. ATM Services 4. Demat Services 5. Corporate Banking 6. Internet Banking 7. Mobile Banking 8. International Banking 9. Safe Deposit Locker 10. RBIEFT 11. E-Pay 12. E-Rail 13. SBI Vishwa Yatra Foreign Travel Card 14. Broking Services 15. Gift Cheques -.21 -

Chapter- 4 Data Analysis and Interpretation 4.1 Research Design \"Research design is the plan, structure and strategy of investigation conceived so as obtain answer to research to question and to control variance.‖ The definition consists of three important terms — plans, structure and strategy. The plan is an outline of the research scheme on which the researcher is to work. 'The structure or research is a more specific outline or the scheme and the strategy shows how the research will be carried out, specifying the method to be used in the collection and analysis of data. Data Source 4.2 Primary data collection method The primary data has been collected from 30 respondents of on the basis of convenient sampling. The samples were collected from online survey. The data was collected from various banks customers. 4.3 Secondary data collection method The secondary data and information have been collected from publication sources such as journal, 'Report on trend and progress of banking in India', annual reports of respective banks. Various websites have also used for data mining. 4.4 Statistical tools used The analysis of data collected through research been done systematically. Simple percentage, pie chart and tables where used to represent variety of data that falls into various categories. The analysis has been done systematically and accurately so as to get correct and authentic. -.22 -

4.5 Data Analysis & Interpretation Table 1.1 since how many years do you have account with SBI bank? Particular Respondent Percentage One year 5 16.6% Two year 12 40% Three year 4 13.3% Four year 3 10% Five year 2 6.8% More than five year 4 13.3% Total 0 100% Objective: To know the since how many years consumer process SBI bank account. 13% 17% 40% 7% 10% 13% One year Two year Three year Four year Five year More than Five Fig 1.1 Since how many years consumer process SBI bank account Interpretation Most of SBI holder is possess account since two years.40% so it is a most preferable since two years and it is highly joint the SBI Bank in two years. -.23 -

Table 1.2 Do you think bank caters all you’re banking needs? Particular Frequency Percentage Yes 27 90% No 3 10% Total 30 100% Objective: To know how many consumers are satisfied banking needs. Column1 yes No 10% 90% Fig 1.2 how many consumers are satisfied banking needs Interpretation Here out of 30 SBI account holder 27 account holders satisfied with banking needs which is 90% and 3 account holder not satisfied with banking needs which is 10%. So that 90% SBI account holder are the most prefer SBI banking needs. -.24 -

Table 1.3 Are you aware of products & services provided by SBI? Particular Frequency Percentage Yes 25 83.33% No 5 16.67% Total 30 100% Objective: To know the how many consumer are aware of product and services provided by SBI 17% Yes No 83% Fig 1.3 how many consumer are aware of product and services provided by SBI. Interpretation Here out of 30 SBI account holder 25 account holder are aware of products and services provided by SBI which is 83.33% and 5 account holder are not aware of products and services provided by SBI which is 16.67%. So that 83.33% account holder are very strong awareness of products and services provided by SBI. -.25 -

Table 1.4 what kind of account do you maintain with this bank? Particular Frequency Percentage Current Account 15 50% Saving account 10 33.33% Loan account 2 6.67% De-Mat account 2 6.67% Credit account 1 3.33% Total 30 100% Objective: To know which type of account consumer are most prefer with this bank. Sales 7% 3% 36% 54% current account saving account loan account De-mat Credit account Fig 1.4 which type of account consumer are most prefer with this bank. Interpretation Here Current accounts are most maintained with The SBI Account with 50%. So the current account most prefer by the SBI holder and another account facility like saving account, loan account, de-mat account, credit account need improvement in the SBI bank. -.26 -

Table 1.5 which of the following facilities have given more importance in your bank? Particular Frequency Percentage Loan facilities 5 16.67% O/D facilities 4 13.33% ATM facilities 17 56.67% Credit card facilities 2 6.67% Other facilities 2 6.66% Total 30 100% Objective: To know which of the facilities have given more importance in SBI bank. Sales 6% 17% 7% 13% 57% Loan Facility O/D facility ATM facility Credit card facility other facility Figure 1.5 which of the facilities have given more importance in SBI bank. Interpretation Here ATM facilities more importance In SBI bank with 56.67%. so the ATM facilities is most prefer by SBI holder and another facilities is poor in the SBI bank. -.27 -

Table 1.6 showing how frequently ATMs used per month ATMs use per month No. Of respondents Percentage Nil 0 0% 1 to 3 times 6 20% 3 to 8 times 15 50% 8 to 12 times 5 16.66% Over 12 4 13.33% Total 30 100% Objective: To show how frequently ATM‘s used per month 0% 20% Nil 13% 1 to 3 times 3 to 8 times 17% 8 to 12 times over 12 times 50% Fig 1.6 Showing how frequently ATMs used per month Interpretation Analysis shows that none of the respondents never visit their ATMs on a monthly basis. 20% of respondents visit their ATM their 1 to 3 times in a month, 50% of respondents visit their ATM 3 to 8 times in a month, 16.67% of respondents visit their ATM 8 to 12 times in a month and 13.33% of respondents visit the ATM over 12 time in a month. -.28 -

Table 1.7 showing how frequently branch banking use per month Branch banking use per No. Of respondent Percentage month Nil 3 10% 1 to 3 times 16 53.33% 3 to 8 times 8 26.67% 8 to 12 times 1 3.33% Over 12 times 2 6.67% Total 30 100% Objective: To find how frequently branch banking use per month 3% 10% Nil 7% 1 to 3 times 3 to 8 times 27% 8 to 12 times over 12 times 53% Fig 1.7 showing how frequently branch banking use per month nterpretation According to Table 1.2, Analysis shows that 10% of the respondents never visit their bank branch on a monthly basis. 53.33% of respondents visit their banks between 1 to 3 times in a month. 26.67% of respondents visit their bank branch 3 to 8 times in a month and 3.33% of respondents visit their branch 8 to 12 times in a month. 6.67% of the respondents visit their bank more than 12 times a month. -.29 -

Table 1.8 Which bank you most prefer for online banking service? Particular Frequency Percentage SBI 18 60% ICICI 2 6.67% HDFC 8 26.67% Others 2 6.66% Total 30 100% Objective: To examine which bank consumer most prefer for online banking services. 28% 56% 13% 3% SBI ICICI HDFC Other Figure 1.8 which bank consumer most prefer for online banking services. Interpretation Here SBI bank most prefer for online banking services which is 60% so SBI online banking services most accepted by SBI account holder because of the best services given by the SBI in term of online services. -.30 -

Table 1.9 What do you feel about Likert scale service quality of your bank? Particular Respondents Percentage High satisfied 9 30% Satisfied 16 53.33% Moderate 3 10% Dissatisfied 2 6.67% High dissatisfied 0 0% Total 30 100% Objective: To check the level of satisfaction from the of you of the respondent. 10% 7% 30% 53% High satisfied satisfied moderate dissatisfied High dissatisfied Fig 1.9 check the level of satisfaction from the of you of the respondent. Interpretation Here Likert scale service quality of SBI bank is satisfied which is 53.33% and it is very high. On the above chart SBI holder is satisfied with the service quality provided by SBI bank. -.31 -

Table 1.10 Do you recommend this bank to your friends, relatives, associates. Particular Respondents Percentage Yes 18 60% No 12 40% Total 30 100% Objective: To know consumer are recommended or not SBI bank to friends, relatives and associates for SBI services. Sales 40% 60% Yes No Figure 1.10 know consumer are recommended or not SBI bank to friends, relatives and associates Interpretation Here most recommended SBI bank to the friends, relatives and associates with 60%. -.32 -

Table 1.11 showing how frequently internet banking is used per month Internet banking used per No. Of respondents Percentage month Nil 3 10% 1 to 3 times 12 40% 3 to 8 times 6 20% 8 to 12 times 5 16.67% 4 13.33% Over 12 30 100% Total 13% 10% nil 1 to 3 times 17% 3 to 8 times 8 to 12 times 40% over 12 times 20% Fig 1.11 showing how frequently internet banking is used per month Interpretation According to the analysis done it shows 10% of respondents never use their internet banking on monthly basis, 40% of respondents use their internet banking 1 to 3 times in a month, 20% of respondents use their internet banking 3 to 8 times in a month, 16.67% of respondents use internet banking 8 to 12 times in a month and 13.33% of respondents use internet banking over 12 times in a month. -.33 -

Table 1.12 Please select the reason applicable which online banking. Particular Respondents Percentage Convenience 16 53.33% To save time 8 26.67% 24 hours access 6 20% Other 0 0% Total 30 100% Objective: To know why consumer are selecting online banking. 55% 24% 12% 9% convenience To save time 24 Hours access Other Fig 1.12 select the reason applicable which online banking. Interpretation Here convenience reason applicable for selecting online banking is most prefer by SBI holder which is 53.33%. -.34 -

Table 1.13 Would you use your mobile phone to do mobile banking. Particular Respondents Particular Yes 20 66.67% No 10 33.33% Total 30 100% Objective: More usage of services the satisfaction level of an account holder amplify. 33% Yes No 67% Figure 1.10 you use your mobile phone to do mobile banking. Interpretation Here mobile phone to do use SBI banking by SBI holder is 66.67% in terms of online SBI banking. -.35 -

Table 1.14 Which of the following mobile banking features you like to use? Particular Respondents Percentage Balance inquiry 16 53.33% Utility bill payment 8 26.67% E-mail & text alerts 2 6.67% Order cheque books 1 3.33% Internal account transfer 3 10% Total 30 100% Objective: To know which of the mobile banking feature SBI account holders like to use 7% 3% 10% 27% 53% Balance inquiry utility bill payment E-mail & text alerts order cheque books Internal account transfer Fig 1.11 mobile banking features you like to use Interpretation Here balance inquiry in mobile banking are most accepted by SBI holder with 53.33% in terms of features SBI holder likes to use. -.36 -

Table 1.15 Have you ever visited bank branches after using online banking? Particular Respondents Percentage Yes 22 73.33% No 8 26.67% Total 30 100% Objective: To find how SBI account holders ever visited bank branches after using SBI online banking 73% 27% Yes No Fig 1.2 showing how frequently branch banking use per month Interpretation Here the 73.33% SBI holder ever visited bank branches after using SBI online banking which is high in terms of visit the bank branches after using SBI online banking. -.37 -

Chapter- 5 FINDINGS AND CONCLUSION Findings of the survey  Most of people are having Saving Bank A/C in more than one bank. 33.33% people have their SBI A/C only in SBI.  SBI is the considered the fastest bank.  SBI is the most trusted bank and it was found that all of the A/C holders say that SBI is the most prestigious bank and ATM centres of SBI are most available than any other bank.  More than half persons have ATM card that's good as it can increase the swiftness of services.  Most of the customers surveyed find ATM facility satisfactory.  All ATM card holders find the operating system easy.  89% people do not use their ATM card in other banks' ATM centre and it‘s Reasons given by the respondents: o Charges levied by the bank o SBI's ATM centre are available everywhere in nearby area.  33.33% of the people surveyed are unaware to the service of net/Mobile banking.  66.67% of the people who are aware to the service do use net/mobile banking.  93% people say yes they get their problems solved, however most of the people surveyed say they never faced problems.  94% of the people surveyed are happy with the services of SBI.  Most of people agree that SBI is No. 1 bank in Jamshedpur. Recommendation  Through most of the people consider SBI faster than other banks but private sector banks which are new are also in competition.  SBI needs to increase its performance in the matter of cooperativeness.  Many ATM card holders complain that ATM centre of Jamshedpur branch often remains out of order so they have to face problems, so SBI should take care of that.  SBI needs to educate it‘s customer about its services. Aware  SBI needs to advertise more about its service.  Many people say that the process of solving problems is too slow. Younger players (Pvt. Banks) are fast in this matter so SBI needs to fasten it‘s services. Opportunities The various opportunities that the new trends bring for the development of banking sector are mentioned below: ❖ Internet Banking: It is clear that online finance will pickup and there will be increasing convergence in terms of product offerings banking services, share trading, insurance, loans, based on the data warehousing and data mining technologies. Anytime anywhere banking will become -.38 -

common and will have to upscale, such up scaling could include banks launching separate internet banking services apart from traditional banking services. ❖ Retail Lending: Recently banks have adopted customer segmentation which has helped in customizing their product folios well. Thus retail lending has become a focus area particularly in respect of financing of consumer durables, housing, automobiles etc., Retail lending has also helped in risks dispersal and in enhancing the earnings of banks with better recovery rates. ❖ Rural area customers: Contributing to 70% of the total population in India is a largely untapped market for banking sector. In all urban areas banking services entered but only few big villages have the banks entered. So that the banks should tap the rural market in the years to come. ❖ Offering various Channels: Banks can offer so many channels to access their banking and other services such as ATM, Local branches, Telephone banking, mobile banking, video banking etc. to increase the banking business. ❖ Other Opportunities: There are many other opportunities in future in the field of Indian banking sector e.g. to enter new business and new markets, to improve efficiency, to deliver high level of customer services. Benefits of Technology in Banking The following are the benefits extended to the various parties with the use of IT: To the Individuals: ❖ Anytime banking- e banking providers 24 hours, all days service to the customers for cash withdrawal from any branch. ❖ Anywhere banking – no matter wherever the customer is in this world, on line banking is used to get the services. ❖ Online purchase of goods and services and payment can be arranged for various purposes through cards. ❖ Customer can also make some permitted transactions from his office or house or while traveling via mobile phone. ❖ Customers can receive relevant and detailed information in seconds, rather than days or weeks. To the Merchants, Traders etc. ❖ Assured immediate settlement and payment to the various transactions made by the traders. ❖ Providing various services to the businessmen at par with the international standards with low transaction cost. ❖ Avoid all the cost and risk problems involved in handling cash, which are very high in business transactions. ❖ Development of global and local clients‘ base can be possible with the development of the IT in Banking. ❖ Other benefits include improved image, improved customer service, eliminating paper, reduced waiting costs and increased flexibility. To the Banks ❖ E-banking provides competitive advantage with unlimited network to the banks. -.39 -

❖ Online banking – an effectiveness medium of promotion of various schemes of the bank, and indeed acts as a marketing tool. ❖ By connecting ATM and PO terminals, risk of over-drawl of cash can be eliminated in case of ATM credit and debit cards. Future prospectus Everyone today is convinced that the technology is going to hold the key to future of banking. The achievements in the banking today would not have make possible without IT revolution. Therefore, the key point is while changing to the current environment the banks has to understand properly the trigger for change and accordingly find out the suitable departure point for the change. Although, the adoption of technology in banks continues at a rapid pace, the concentration is perceptibly more in the metros and urban areas. More and more programs and software in regional languages could be introduced to attract more and more people from the rural segments also. Conclusion Technology today has become integral to the business of banking; it is difficult to envision one without the other. However as with other resources it has costs attached to it and with substantial investment in IT infrastructure business leaders will have to seek answers to whether the infrastructure is being used optimally. Technology have to be client centrically to derive optimum edges and banks can got equally target client retention and increasing share of case instead of solely acquisition. For many of banking customers going back to their primary bank for the other new relationship could be a major challenge. This can be attributable to the insufficiency of CRM and atomic number 83 solutions. Knowledge integration of client interaction through multiple channels remains not on the market to side branch personnel. With redoubled use technology additionally comes redoubled risk of security breaches. Banks can got to on their toes with real time alert systems and governance police‘s to manage the threat for early detection and control. The longer term IT version and strategy of banks can got to balance price delivered to the firm. It‘ll got to be aligned to the strategic objectives of the firm and be in command of the delivering desired price. To achieve this difficult task of satisfying the customers, the banks area unit turning towards the Technology for the assistances. Technology has been one among the foremost necessary factors for the event of human beings. Information and communication technology is that the major advent within the field of technology that is employed for access, process, storage and dissemination of data electronically. Industry is quick growing with the employment of technology within the variety of ATMs, online banking, SMS banking, mobile banking, internet banking etc., Plastic card is one among the banking merchandise that cater to the wants of retail section has seen its range grow in patterned advance in recent years. Net has compete a many opportunities for players within the banking sector. Whereas the new entrants have the advantage of latest technology, the goodwill of the established banks offers them a special chance to sector the net world. -.40 -

Annexure: QUESTIONNAIRE Dear Respondent, I am the students of Karim City College, Jamshedpur. As part of our study, We are conducting survey on ―A Role of Technology in Banking about SBI online bank service in Jamshedpur‖ Which will be presented at our college as a part of our study. We ensure you that the data provided by you will be kept confidential and used for academic purpose only. Please tick in [ ] following details as applicable. Respondent's personal details:- Name : - ________________ Email Id:-_________________ 1. Since How many years do you have account with SBI bank? [ ] One year [ ] Two years [ ] three years [ ] four years [ ] five years [ ] More than five years 2. Do you think bank caters all your banking needs? [ ] Yes [ ] NO -.41 -

3. Are you aware of products & services provided by SBI? [ ] yes [ ] NO 4. What kind of account do you maintain with this bank? [ ] current account [ ] saving account [ ] loan account [ ] Credit account [ ] De-mat account 5. Which of the following facilities have given more importance in your bank? [ ] Loan facilities [ ] O/D facilities [ ] ATM facilities [ ] other facilities [ ] Credit card facilities 6. How frequently ATM‘s used per month. [ ] Nil [ ] 1 to 3 times [ ] 3 to 8 times [ ] 8 to 12 times [ ] Over 12 7. How frequently branch banking use per month [ ] Nil [ ] 1 to 3 times [ ] 3 to 8 times [ ] 8 to 12 times [ ] Over 12 -.42 -

8. Which bank on most refer for online banking service. [ ] ICICI [ ] SBI [ ] HDFC [ ] OTHERS 9. What do you feel about likert scale service quality of your bank? [ ] highly satisfied [ ] satisfied [ ] moderate [ ] dissatisfied [ ] highly dissatisfied 10. Do you recommend this bank to your friends, relatives, associates. [ ] Yes [ ] No 11. How frequently internet banking is used per month [ ] Nil [ ] 1 to 3 times [ ] 3 to 8 times [ ] 8 to 12 times [ ] Over 12 12. please select the reason applicable which online banking. [ ] Convenience [ ] To save time [ ] 24 hours access [ ] Others -.43 -

13. would you use your mobile phone to do mobile banking. [ ] Yes [ ] No 14. Which of the following mobile banking features you like to use? [ ] Balance inquiry [ ] Utility bill payment [ ] E-mail & text alerts [ ] Order cheque books [ ] Internal account transfer 15. Have you ever visited bank branches after using online banking? [ ] Yes [ ] No -.44 -