Professional Documents
Culture Documents
Submitted By:
Vasim S. Shaikh (KIM-Kalol Institute of Management)
____________________________________________________________________________________
DECLARATION
I VASIM hereby declare that the dissertation report entitled Internet Banking and Mobile Banking Safe and Secure Banking submitted for the partial fulfillment of the degree of Masters in Business Administration from Kalol Institute of Management, Gujarat Technological University, Gujarat, India is original document of mine and data provided is authentic and to the best of way of my knowledge.
Vasim
Preface
This report documents the work done during the summer internship at State Bank of India, Ahmedabad under the supervision of AGM of State Bank of India and Pranav Trivedi (Deputy Manager). The report first shall give an overview of the Industry and tasks completed during the period of internship with objective. Then the results obtained shall be discussed and analyzed. Report shall also elaborate on the the future works which can be persuaded as an advancement of the current work.
Acknowledgement
Every successful endeavor has its share of problems and hurdles, but at the same times there are people who help to overcome these difficulties and thus we want to expirees our self heartfelt gratitude towards the people who have been of great help to us in achieving the purpose.
Mostly importantly I would like to thank Prof. Pinnal Barot for supporting in the preparation of project and providing the guidance during the training.
I am obliged to Mr. Pranav Trivedi (Deputy Manager) who has given us an opportunity to get practical knowledge in the field of Banking and also for helping us to undergone this grand project. The learning during this project has been a great experience.
Finally, I would like to thank all those who directly and indirectly contributed to this project.
Executive Summary
With the rapid globalization of the Indian economy, enterprises are facing with ever changing competitive environment. Enterprises are adopting strategies aimed at developing competitive advantage based on enhanced customer value in terms of product differentiation, quality, speed, service and costs. In the post liberalization era, with the deregulation of Indian economy, the financial service sector witnessing a complete metamorphosis and technology is playing a very significant role in this record. Over the last decade India has been one of the fastest adopters of information technology, particularly because of its capability to provide software solution to organizations around the world. This capability has provided a tremendous impetuous to the domestic banking industry in India to deploy the latest in technology, particularly in the Internet banking, Mobile Banking and e-commerce arenas.
In India the bank are being segregated into different groups such as nationalized banks (Government owned), private banks and foreign banks. There are 27 Public Banks, 31 Private Banks, and 29 Foreign Banks. Each has their own dedicated target market. Few of them only work in rural sector while the other works in rural as well as urban. Many even are only catching in cities. Some are of Indian origin and some are foreign players.
Banks are growing in size by mergers and acquisitions, which have been driven by communication and technology. Technology is playing a major role in increasing the efficiency, courtesy and speed of customer service. It is said to be the age of E-banking. An Online Banking and Mobile Banking user is expected to perform at least one of the following transactions online:
1. Checking account balance and transaction history 2. Paying bills 3. Transferring funds between accounts 4. Requesting credit card advances 5. Ordering checks 6. Managing investments and stocks trading
From a banks perspective, using the Internet is more efficient than using other distribution mediums because banks are looking for an increased customer base. Using multiple distribution channels increases effective market coverage by enabling different products to be targeted at different demographic segments. Also Banks cannot risk losing customers to competitors within the aggressive competition in the banking industry around the world. Moreover Internet delivery offers customized service to suit the needs and the likes of each user. Mass customization happens effectively through Online Banking. It reduces cost and replaces time spent on routine errands with spending time on business errands. Online Banking means less staff members, smaller infrastructure demands, compared with other banking channels. From the customers perspective, Online Banking provides a convenient and effective way to manage finances that is easily accessible 24 hours a day, seven days a week. In addition information is up to date. Internet banking and Mobile Banking refers to the use of internet as a remote delivery channel for banking services. Web based or internet banking and Mobile Banking is poised to become the future face of banking services. The number of visits to the bank can be minimized effectively by operating from the internet account. Thus the number of contacts required to perform a transaction and solve a problem has been reduced through online banking. The usual branches of banks have culminated into PC networks, whereby the consumer can draw all the benefits and services of the bank at a single click of the mouse. Nevertheless Online Banking has disadvantages for banks like how to work the technology, set-up cost, legal issues, and lack of personal contact with customers and for customers there are security and privacy issues.
Table Content:
Name
Pg. No.
I II III IV 1 3 7 8 9 10 11
3.5 3.6
11 13
4. 5. 5.1 5.2 6. 7. 8. 9.
Company Profile Internet Banking and Mobile Banking Internet Banking Mobile Banking Data Analysis and Interpretation Hypothesis Findings Recommendations and Conclusion
18 30 31 38 44 78 81 83 86 87 90
10.
10.1 10.2
Annexure
Questionnaire Bibliography
Objective:
To find out Internet Banking and Mobile Banking is secure or not. To understand the concept of Internet banking and mobile banking. To know the customer preference regarding internet banking and mobile banking.
1. Sampling Sample Design Sample Size Sampling Units Sampling Technique Quantitative 100 Customer 5 Banks Convenience
Regulating New Banking Models (Internet Banking and Mobile Banking) that can Bring Financial Services to All
Claire Alexandre, Ignacio Mas and Dan Radcliffe (Bill & Melinda Gates Foundation) August 2010 Technology, and in particular the spread of real-time communications networks, permits banks to delegate last mile cash management and customer servicing functions to third-party retail outlets. By making basic deposit, withdrawal, and payment functions available securely through retail shops that exist in every village and neighborhood, there is an opportunity to dramatically increase the physical footprint of banks and to transform the basic economics of low-balance savings. Banking regulations need to be adapted to these new possibilities of banking beyond bank branches. We highlight five areas where sharpened regulatory analysis would help strike a better balance between maximizing the opportunities of these models and containing risks: (i) branching regulations which distinguish between pure transactional outlets and full service bank branches; (ii) regulations which permit banks to engage third-party retail outlets with minimal financial risks for both banks and their customers; (iii) consumer protection regulations that help customers understand and act upon their rights in a more complex service delivery chain, without burdening banks with unnecessary provisions; (iv) tiered know-your-customer (KYC) regulations that permit immediate account opening with minimum barriers for poor people, with a progressive tightening of KYC as their usage of financial services grows; and (v) creating regulatory space for a class of non-bank e-money issuers authorized to raise deposits and process payments, but not to intermediate funds.
Branchless and Mobile Banking Solutions for the Poor: A Survey of the Literature
About 2.6 billion people in the world do not have access to formal financial services, and yet one billion of them have a mobile phone. Branchless banking systems take advantage of increasingly ubiquitous real-time mobile communications networks to bring banking services into everyday retail stores, thereby alleviating the lack of banking infrastructure in the communities where poor people live and work. Most of these deployments are quite recent; hence there is a shortage of hard empirical evidence relating to them. In this article, I review the emerging literature on the definitions and model taxonomies employed in mobile banking; the status and drivers of global adoption of these schemes; the take-up and usage patterns of customers and their socioeconomic impact; and, finally, regulatory issues. Our objective is to help policymakers and practitioners in their continued efforts to create an enabling environment for branchless banking.
Definition, Key Concepts, and Taxonomy of Branchless Banking Schemes Branchless banking is a term coined by the Consultative Group to Assist the Poor (CGAP; Lyman et al., 2006) to refer to new distribution channels that allow financial institutions and other commercial actors to offer financial services outside traditional bank premises. Branchless banking allows customers to conduct basic financial transactions such as deposits and withdrawals at everyday retail stores, using technology readily available to both customers and store clerks in the form of cards or mobile phones to properly secure and authorize the transactions.
Alexandre et al. (2011) prefer the term banking beyond branches in recognition of the fact that bank branches still play a fundamental role in supporting the liquidity of the cash-in/cash-out network in branchless banking schemes: In the new cash ecosystem, retail outlets handle the last mile, but banks still do the long haul. Bank branches will thus retain a role as cash distribution nerve centers in support of non-bank retail outlets located in their catchment area
CONCLUSION
There are some important questions that need to be answered before I can conclude that mobile money will become a powerful tool for financial inclusion. First, how will the experience be replicated in markets where mobile operators have a less dominant position, regulators are less open, and demand conditions less certain? Second, how will banks and other financial service providers connect to mobile money platforms to expand the range of financial services available through these platforms? And, third, will the cost of financial transactions offered through mobile money schemes fall enough to really become of use to poor people who need to transact at levels as low as $1?
The biggest gap in the research on branchless banking remains the market structure aspects: understanding the set of incentives that operate on each of the players involved (customers, banks, telecoms, financial switches, regulators). There is not likely to be a unique model that balances the interests of these players, and their respective roles are likely to vary from country to country and from deployment to deployment. Nevertheless, I need to get smarter about harnessing their commercial interests and competitive advantages within a cooptation framework. Only then I will be able to build the kind of ubiquitous retail payment platform that can be used to deliver financial services efficiently and profitably to all.
SOURCE: http://papers.ssrn.com
3. INTRODUCTION
With stiff competition and advancement of technology, the services provided by banks have one month in the south. Banks are among the main participants of the financial system in India. Banking offers several facilities & Opportunities. This section provides comprehensive and updated information, guidance and assistance in all areas of banking in India.
Bank of Hindustan, set up in 1870, was the earliest Indian Bank. Banking in India on modern lines started with the establishment of three presidency banks under Presidency Bank's act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras. The commercial banking structure in India consists of: Scheduled Commercial Banks & Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw-able by cheques, draft, and order or otherwise."
The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain customer base.
The evolution of IT services outsourcing in the Indian banks has presently moved on to the level of Facilities Management (FM). Banks now looking at business process management (BPM) to increase returns on investment, improve customer relationship management (CRM) and employee productivity.
For, these entities sustaining long-term customer relationship management (CRM) has become a challenge with almost everyone in the market with similar products.
Private Sector Banks: The RBI has given licenses to new private sector banks as part of the liberalization process. The RBI has also been granting licenses to industrial houses. Many banks are successfully running in the retail and consumer segments but are yet to deliver services to industrial finance, retail trade, small business and agricultural finance.
Foreign banks: Foreign banks have been operating in India for decades with a few of them having operations in India for over a century. The number of foreign bank branches in India has increased significantly in recent years since RBI issued a number of licenses - well beyond the commitments made to the
World Trade Organization. The presence of foreign banks in India has benefited the financial system by enhancing competition, resulting in higher efficiency. There has also been transfer of technology and specialized skills which has had some "demonstration effect" as Indian banks too have upgraded their skills, improved their scale of operations and diversified into other activities. At a time when access to foreign currency funds was a constraint for the Indian companies, the presence of foreign banks in India enabled large Indian companies to access foreign currency resources from the overseas branches of these banks. Also with the presence of foreign banks, as borrowers in the money market and their operation in the foreign exchange market has resulted in the creation and deepening of the inter-bank money market. Now, it is the challenge for the supervisors to maximize the advantages and minimize the disadvantages of the foreign banks' local presence.
Micro Finance
Industry Segments
Investment Banking
Internet banking
3.5.2 Borrower's ability to meet financial obligations The borrower's obligation to clean up contaminated sites might impair his or her ability to repay a loan. The contamination might also reduce the value of the collateral. Prudent lenders are following the environmental trends and changes in regulatory framework to assess the possible implications of these changes on their clients' overall financial position.
3.5.3 Growing environmental concerns The last few decades have been marked by numerous changes in the regulatory framework relating to environmental protection. Recent scientific discoveries of environmental and health risks associated with pollution have contributed to an increase in public demand for environmental quality. These growing concerns have contributed to a major shift in public perception of corporate roles in society. Influenced by these trends, some banks have begun looking closely into their own environmental and social performance. In many cases this effort has resulted in adoption of energy and resource efficiency programs within the institutions themselves.
3.5.4 Business opportunities The traditional approach of the banking sector to sustainability is often regarded as reactive and defensive. However, several international banks have recently adopted innovative, proactive strategies to capture the opportunities associated with sustainability. They have developed new products such as ethical funds or loans specifically designed for environmental businesses to capture new market opportunities associated with sustainability.
3.5.5 Risk and reward The ability to gauge the risks and take appropriate position will be the key to successful banking in the emerging scenario. Risk-takers will survive, effective risk managers will prosper and risk-averse are likely to perish, the report asserts.
In this context, the report makes a very pertinent recommendation that risk management has to trickle down from the corporate office to branches.
As audit and supervision shifts to a risk-based approach rather than transaction oriented, the risk awareness levels of line functionaries also will have to increase.
The report also talks of the need for banks to deal with issues relating to `reputational risk' to maintain a high degree of public confidence for raising capital and other resources.
Regulation The expected integration of various intermediaries in the financial system would require a strong regulatory framework, the report states. It would also require a number of legislative changes to enable the banking system to remain contemporary and competitive. Underscoring that there would be an increased need for self-regulation, the report states that development of best practices could evolve better through self-regulation rather than based on regulatory prescriptions.
For instance, to enlist the confidence of the global investors and international market players, the banks will have to adopt the best global practices of financial accounting and reporting. It is expected that banks would migrate to global accounting standards smoothly, although it would mean greater disclosure and tighter norms, the report adds.
Notwithstanding the limited time ahead, the expectations, suggestions and recommendations of the Banking Industry Vision report are well within the realm of realization in part or whole. The first phase of banking reforms was born out of panic. The second phase can be implemented from a position of strength and confidence in a compressed time-frame.
Growing economy THE INDIAN economy has shown tremendous growth over the past decade. This statement may seem odd to the economists who keep comparing the growth rates to that of China or the East Asian Tigers. These countries have definitely shown good economic growth, but India's is nothing to be scoffed at.
This assertion is not being made by comparing the GDP growth, FDI inflow, changes in per capita income and other economic criteria, but by looking at the increase in the availability of goods and services.
A while ago, visiting foreign countries, one used to wonder when India would catch up. People walking around with mobile phones, shopping malls overflowing with goods, and even dozens of branded water. Coming from India, where water had to be boiled and filtered before consumption, these countries seemed like paradise.
Now, a decade later, India seems to have caught up with some of these things at least. Take the cell phones and pagers. Hong Kong went through the pager phase for two or three years before going cell. In India, pagers did not take off, while cell phones clicked. The accelerated telecommunications revolution has made cell phone easily affordable. India is no longer the backwaters of for hi-tech products.
An economist may argue that availability of cell phones and branded water does not indicate a developed economy. But even they have to agree that India seems to have changed from a country of shortages to one of plenty. And along with plentiful supplies, there is also variety. In the early 1990s, there were three varieties of car models/makers Ambassador, Fiat and Maruti 800. Today there are apparently some 500 models from more than 10 manufacturers.
Developmental economists may argue that plentiful supply of goods and services does not mean that India has become prosperous and that India has a long way to catch up with the developed economies. But one has to agree that the India has made much progress over the past decade.
Western economies have grown partly because of consumption economics. Those economies produced large number of goods, employing more and more people to produce these goods. These employees in turn consumed the goods, creating a virtuous cycle. Maybe India is following this path.
All the good are available in plenty. Now the living standards of people have to be improved so that they start consuming these goods. Maybe, that is why the new Finance Minister wants to put more money in the housewives' hand.
All these developments need not mean banks will give the go-by to social banking. Rather than being seen as directed lending such lending would be business driven, the report predicts. Rural market comprises 74 per cent of the population, 41 per cent of the middle-class, and 58 per cent of disposable income.
Consumer growth is taking place at a fast pace in 17,000-odd villages with a population of more than 5,000. Of these, more than 50 per cent are concentrated in just seven states. Small-scale industries would remain important for banks.
However, instead of the narrow definition of SSI based on the investment in fixed assets, the focus may shift to small and medium enterprises (SMEs) as a group. Changes could be expected in the delivery channel for small borrowers, agriculturists and unorganized sectors also.
Technological developments would render flow of information and data faster leading to faster appraisal and decision-making. This would enable banks to make credit management more effective, besides leading to an appreciable reduction in transaction cost.
To reduce investment costs in technology, banks are likely to resort more and more too sharing facilities such as ATM networks, the report says. Banks and financial institutions will join together to share facilities in the areas of payment and settlement, back-office processing, data warehousing, and so on.
The advent of new technologies could see the emergence of new players doing financial intermediation. For example, according to the report, I could see utility service providers offering, say, bill payment services or supermarkets or retailers doing basic lending operations. The conventional definition of banking might undergo changes.
Mobile banking Banking on Wireless Get real-time banking information on your handset. Just register your mobile number with us, Choose alerts and set limits that you require and relax. You will receive automated alerts on the transactions in your account instantly, anywhere in the world. What is more, it is flexible and can be personalized to your needs. In addition you can also "PULL" account information at your convenience!
Register now and get into the world of convenience through the unique Mobile Alert service of Federal Bank which is comprehensive and flexible. Mobile Banking services enable a customer to get information whenever he wants by sending an SMS in the specified format. Also he will get
Mobile Alerts for transaction happening in his account. He can restrict the Alerts to desired transactions only. The service is available to customers all over the world.
Please register mobile phone number with your branch to avail of this service. When registration is done for Mobile banking, preset Alerts will be enabled automatically to the customer. For availing Mobile Banking facilities, the customer has to indicate a four-digit access code number, which will act as a password to ensure privacy and security.
The Mobile Banking facility is available to SB, SBNRE, SBONR, CA and ODCC customers.
Facilities Available. View Account Balance Mini Statement Change four-digit access code / PIN. Mobile Phone Number change Discontinue / Re enable alerts Options for changing the amount for sending the alerts. Account Statement Request Cheque Book Request Help about the available options.
State Bank of India is the largest state-owned banking and financial services company in India. The Bank provides banking services to the customer. In addition to the banking services, the Bank through their subsidiaries, provides a range of financial services, which include life insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund management and primary dealership in the money market.
The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/ Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking segment consists of branches in National Banking Group, which primarily includes personal banking activities, including lending activities to corporate customers having banking relations with branches in the National Banking Group. SBI provides a range of banking products through their vast network of branches in India and overseas, including products aimed at NRIs.
The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. The State bank of India is the 10th most reputed company in the world according to Forbes. The bank has 156 overseas offices spread over 32 countries. They have branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town.
ABOUT LOGO
Togetherness is the theme of this corporate loge of SBI where the world of banking services meet the ever changing customers needs and establishes a link that is like a circle, it indicates complete services towards customers. The logo also denotes a bank that it has prepared to do anything to go to any lengths, for customers. The blue pointer represent the philosophy of the bank that is always looking for the growth and newer, more challenging, more promising direction. The key hole indicates safety and security
VISION STATEMENT: Premier Indian Financial Service Group with prospective world-class Standards of efficiency and professionalism and institutional values. Retain its position in the country as pioneers in Development banking. Maximize the shareholders value through high-sustained earnings per Share. An institution with cultural mutual care and commitment, satisfying and Good work environment and continues learning opportunities.
VALUES: Excellence in customer service Profit orientation Belonging commitment to Bank Fairness in all dealings and relations Risk taking and innovative Team playing Learning and renewal Integrity Transparency and Discipline in policies and systems
ORGANISATION STRUCTURE:
CHAIRMAN
CVO
DMD (IT)
BUSINESS GROUPS
Corporate Banking
National Banking
International Banking
Treasury Operations
1843- Another sister bank is formed: Bank of Madras, which, together with Bank of Bengal and Bank of Bombay become known as the presidency banks, which had the right to issue currency in their regions.
1861- The Presidency Banks Act takes away currency issuing privileges but offers incentives to begin rapid expansion, and the three banks open nearly 50 branches among them by the mid-1870s.
1876- The creation of Central Treasuries ends the expansion phase of the presidency banks.
1921- The presidency banks are merged to form a single entity, Imperial Bank of India.
1955- On 1st July State Bank of India was constituted under the State Bank of India Act 1955, for the purpose of taking over the undertaking and business of the Imperial Bank of India. The Imperial Bank of India was founded in 1921 under the Imperial Bank of India Act 1920. The Bank transacts general banking business of every description including, foreign exchange, merchant banking and mutual funds.
1959- On September State Bank of India (Subsidiary Bank) Act was passed. On October State Bank of Hyderabad become the first subsidiary of SBI.
1960- During this period, State Bank of Jaipur, State Bank of Bikaner, State Bank of Indore, State Bank of Travancore, State Bank of Mysore, State Bank Patiala and State Bank of Saurashtra became subsidiaries of the bank.
1962- The Bhor State Bank Ltd was Amalgamated with the Bank bring the total number of minor State associated banks so amalgamated to five. A scheme for amalgamation of the Bank of Aundh Ltd., was also approved. On 20th August, the Unit Bank Ltd. Chennai was taken over by the Bank.
1963- In October Branch in London become bankers to the Indian High Commission, thereby taking over a function till then performed by the office of RBI. Of the other business transacted by the Branch, an important aspect was medium term loans mostly to Indian shipping companies.
1977- During the year bank introduced the Perennial Pension Plan Scheme under which if the depositors make a regular monthly payment of a fixed amount for a period of 84 to 132 months, they become eligible from the 86th and 134th months respectively for getting a monthly pension of predetermined amount forever.
- In order to meet all the developmental needs of the villages including their social and cultural needs, the bank launched an integrated rural development program, aimed at not only covering the credit needs of agriculture and agricultural activities and village industries, but also housing and social activities.
1980 - Bank introduced the cash Certificate Scheme under which deposit certificate are issued for a fixed period on payment of the issue price specified for the respective maturity period and the face value corresponding to the issue price plus interest compounded at quarterly intervals is paid on maturity. The certificates are issued for the face value of Rs 100, Rs 1000, Rs 10,000 and Rs 50,000 maturing after 29,65,84 and 120 months.
1982- The Non-Resident Investment Cell was set up, which had streamlined the working operations of the non-resident investment sections at important centers.
1983- SBI launched self employment scheme, for providing self-employment to educated unemployed youth. Educated unemployed youths are encouraged to undertake self-employment ventures in industry, services and business.
1984 - The bank provides need-based rehabilitation assistance to large and medium sick industrial units.
1986 - (SBI Capital Markets is created).At the end of the year 324 sick units with an outstanding of Rs 1069 crores was assisted. Of these, 107 units were considered viable and 60 from them were placed under regular nursing program.
-On 1st August a new subsidiary named SBI Capital Market was functioning up leasing business and certain other new services.
independently, took
1987 - Up to the end of the year the bank had sponsored 30 Regional Rural Banks covering 66 backward and under banked districts in the country.
- In terms of deployment, the advances portfolio of overseas offices rose to Rs 5,767 crores. Investments in inter-bank money markets and also in prime securities amounted to Rs 2,670 crores by the end of the year.
1989 - SBICAP, in their capacity as Trustee and Manager of Mutual Fund, launched two scheme viz., Magnum Monthly Income Scheme 1989 and Magnum Tax Service Scheme 1990.
- During the same period SBI in association with Morgan Stanley Asset Management Inc. of USA, launched the India Magnum Fund.
1995 - SBI Commercial and International Bank Ltd. are launched as part of SBIs stepped-up international banking operations.
1996 - On 3rd October the Bank Issued 261,45,000 GDRs amounting to 5,22,90,000 equity shares. 1 GDR is issued to 2 equity shares. The issue price of GDR was US $ 14.15 per GDR.
2000 -The Bank has become the first government owned financial institution to join the rank of companies declaring interim dividend.
-The Bank launched the "Metal (Gold) Loan Scheme" in Coimbatore. This is the third scheme to be introduced by SBI.
-SBI is also forming a subsidiary - SBI Gold and Precious Metals Pvt. Ltd. with 50 per cent equity participation.
-The Bank has become the first public sector bank to offer fixed-rate home loans.
2001 - The Bank has signed an MoU with Cardif S.A. for the bank's life insurance business.
July 3- Announces the launch of the SBI International card and the SBI Global Card for global travelers in India. SBI International cards and SBI Gold Cards would be accepted at over 20 million Visa outlets worldwide and one lakh outlets in India. - State Bank of India was presented the award for JD Power Asia Pacifics 2001 India Sales Satisfaction Index (SSI) and Consumer Financing Satisfaction (CFS)
-SBI enters into ATM sharing agreements with UTI Bank & HDFC Bank
-Tata Motors on December 7, 2004, signs an MoU with State Bank of India (SBI)
2007- The State Bank of India (SBI) has become the first foreign bank to set up a branch in the Israel's diamond exchange. Besides diamonds, they also see huge potential in telecommunications, hi-tech, chemicals, textiles, agriculture and water management, food processing, pharmacy and health care.
2008- State Bank of India (SBI) has signed a Joint Venture Agreement with Insurance Australia Group to form a Joint Venture Company which will be engaged in General Insurance business in India.
2010- State Bank of India, with a debit card base of over 70 million, comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has added chip and PIN-based Platinum Debit Card to its bouquet on March 26.
- State Bank of India (SBI) has signed a pact with Unique Identification Authority of India (UIDAI) to work as a registrar for the UID registration of residents. It has become the first bank to take up registration work for the UIDAI project. As a registrar, SBI will capture through empanelled enrolment agencies, the biometric characters such as finger prints, iris and so on and send the information to UIDAI.
5.1.1 History
Online services started in New York in 1981 when four of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotext system. Because of the commercial failure of videotext these banking services never became popular except in France where the use of videotext (Minitel) was subsidized by the telecom provider and the UK, where the Prestel system was used.
5.1.4 Risks
E-banking is causing a shift in the weighting of existing categories toward those risks arising from the increase use of IT.
According to the report, Electronic Banking, those risks can be categorized as strategic risks, operational risks, legal risks, reputational risks, and systematic risks.
Strategic risks Strategic risk results occur when decisions are taken by a management who is not able to keep up with technology, and commits missteps in planning and implementing strategy. A specific strategic risk to multi-channel banks is market cannibalization.
Operational risks Operational risk .encompasses all risks originated directly in business operations, and they can include, security breach fraud, malfunctions, and human or IT problems. These risks can lead to the financial losses and disruptions of banking operations.
Legal risks These risks are derived from the fact that e-commerce laws are not yet in place, or are just being newly enacted. Hence, jurisdiction varies from country to country and uniformity is missing. As an example, while to certain banking authorities, the solicitation of customers in their jurisdiction already constitutes a banking operation for
Reputational risks This risk is related to customers fluctuations in confidence. It takes important trust from the customer side in his Internet bank to perform any banking transactions, but this trust can be quickly lost if the Internet bank cannot provide a secure, trouble free Internet banking experience
Systemic risk Systemic is defined here as the macro prudential implications of Internet banking. Indeed, there is no dispute that Internet banking has changed the risk structure of the banking sector, by increasing the operational risk.
To The Branch Manager State Bank of India .. I wish to register as a user of OnlineSBI, SBIs Internet Banking Service.
Name of Customer
(25 Characters)
Mobile Number:
+91
E-Mail:
Date of Birth:
DD
MM
YY
My Account Numbers
* Rights on the OnLineSBI Service will be same as that in your account at the branch. ** Transaction rights to transfer funds within own CIF, e-TDR/e-STDR and new a/c opening request through branch intervention
I have read the provisions contained in the Terms of Service (Terms & Conditions) document of OnlineSBI and accept them. I agree that the transactions executed over OnlineSBI under my Username and Password will be binding on me. Customers Signature: _________________
Date: ___________________
Security:
The Branch where the customer maintains his/her account will assign: a) b) User-id & Password
The User-id and Password given by the branch must be replaced by UserName and Password of customers choice at the time of first log-on. This is mandatory. Bank will make reasonable use of available technology to ensure security and to prevent unauthorized access to any of these services. The OnlineSBI service is VERISIGN certified which guarantees, that it is a secure site. It means that a) You are dealing with SBI at that moment.
b) The two-way communication is secured with 128-bit SSL encryption technology, which ensures the confidentiality of the data during transmission. You are welcome to access OnlineSBI from anywhere anytime. However, as a matter of precaution, customers may avoid using PCs with public access. There is no way to retrieve a password from the system. Therefore if a customer forgets his/her password, he/she must approach the branch for re-registration. Banks terms:
All requests received from customers are logged for backend fulfilment and are effective from the time they are recorded at the branch. Rules and regulations applicable to normal banking transactions in India will be applicable mutatis mutandis for the transactions executed through this site Dispute between the customer and the Bank in this service is subject to the jurisdiction of the courts in the Republic of India and governed by the laws prevailing in India. The Bank reserves the right to modify the services offered or the Terms of Service (Terms & Conditions) of OnlineSBI. The changes will be notified to the customers through a notification on the Site.
Customers obligations:
The customer has an obligation to maintain secrecy in regard to Username & Password registered with the Bank. The bank presupposes that login using valid Username and Password is a valid session initiated by none other than the customer.
Transaction executed through a valid session will be construed by SBI to have emanated from the registered customer and will be binding on him/her. The customer will not attempt or permit others to attempt accessing the OnlineSBI through any unlawful means. Dos & Donts:
The customer should keep his/her User ID and password strictly confidential and should not divulge the same to any other person. Any loss sustained by the customer due to non-compliance of this condition will be at his/her own risk and responsibility and the Bank will not be liable for the same in any manner.
The customer is free to choose a password of his/her own for OnlineSBI services. As a precaution a password that is generic in nature, guessable or inferable personal data such as name, address, telephone member, driving license, date of birth etc. is best avoided. Similarly it is a good practice to commit the password to memory rather than writing it down somewhere.
It may not be safe to leave the computer unattended during a valid session. This might give access to your account information to others.
(Source: www.onlinesbi.com)
5.2
MOBILE BANKING
Mobile banking (also known as M-Banking, mbanking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device.
Recent transactions Due date of payment (functionality for stop, change and deleting of payments) PIN provision, Change of PIN and reminder over the Internet Blocking of (lost, stolen) cards
Payments, deposits, withdrawals, and transfers Cash-in, cash-out transactions on an ATM Domestic and international fund transfers Micro-payment handling Mobile recharging Commercial payment processing Bill payment processing Peer to Peer payments Withdrawal at banking agent Deposit at banking agent
The desire for interoperability is largely dependent on the banks themselves, where installed applications (Java based or native) provide better security, are easier to use and allow development of more complex capabilities similar to those of internet banking while SMS can provide the basics but becomes difficult to operate with more complex transactions.
There is a myth that there is a challenge of interoperability between mobile banking applications due to perceived lack of common technology standards for mobile banking. In practice it is too early in the service lifecycle for interoperability to be addressed within an individual country, as very few countries have more than one mobile banking service provider. In practice, banking interfaces are well defined and money movements between banks follow the IS0-8583 standard. As mobile banking matures, money movements between service providers will naturally adopt the same standards as in the banking world.
On January 2009, Mobile Marketing Association (MMA) Banking Sub-Committee, chaired by Cell Trust and VeriSign Inc., published the Mobile Banking Overview for financial institutions in which it discussed the advantages and disadvantages of Mobile Channel Platforms such as Short Message Services (SMS), Mobile Web, Mobile Client Applications, SMS with Mobile Web and Secure SMS.
[B] Security:
Security of financial transactions, being executed from some remote location and transmission of financial information over the air, are the most complicated challenges that need to be addressed jointly by mobile application developers, wireless network service providers and the banks' IT departments.
The following aspects need to be addressed to offer a secure infrastructure for financial transaction over wireless network: Physical part of the hand-held device. If the bank is offering smart-card based security, the physical security of the device is more important.
Security of any thick-client application running on the device. In case the device is stolen, the hacker should require at least an ID/Password to access the application.
Authentication of the device with service provider before initiating a transaction. This would ensure that unauthorized devices are not connected to perform financial transactions.
One-time password (OTPs) are the latest tool used by financial and banking service providers in the fight against cyber fraud.[5] Instead of relying on traditional memorized passwords, OTPs are requested by consumers each time they want to perform transactions using the online or mobile banking interface. When the request is received the password is sent to the consumers phone via SMS. The password is expired once it has been used or once its scheduled life-cycle has expired.
Because of the concerns made explicit above, it is extremely important that SMS gateway providers can provide a decent quality of service for banks and financial institutions in regards to SMS services. Therefore, the provision of service level agreements (SLAs) is a requirement for this industry; it is necessary to give the bank customer delivery guarantees of all messages, as well as measurements on the speed of delivery, throughput, etc. SLAs give the service parameters in which a messaging solution is guaranteed to perform.
banking more and more useful, their expectations from the solution will increase. Banks unable to meet the performance and reliability expectations may lose customer confidence. There are systems such as Mobile Transaction Platform which allow quick and secure mobile enabling of various banking services. Recently in India there has been a phenomenal growth in the use of Mobile Banking applications, with leading banks adopting Mobile Transaction Platform and the Central Bank publishing guidelines for mobile banking operations.
Feasibility has applied to Mobile Banking pertains to the following areas: Technical feasibility Operational feasibility Economical feasibility
TECHNICAL FEASIBILITY:
Mobile Banking uses the web technologies, which is rampantly employed these days worldwide. The world without the web is incomprehensible today. That goes to proposed system is technically feasible.
OPERATIONAL FEASIBILITY:
To determine the operational feasibility of the system I should take into consideration the awareness level of the users. This system is operational feasible since the users are familiar with the technologies and hence there is no need to gear up the personnel to use system. Also the system is very friendly and to use.
ECONOMIC FEASIBILITY:
To decide whether a project is economically feasible, I have to consider various factors as: i) Cost benefit analysis ii) Long-term returns iii) Maintenance costs
The proposed Mobile Banking is computer based. It requires average computing capabilities and access to internet, which are very basic requirements hence it doesnt incur additional economic overheads, which renders the system economically feasible.
OCCUPATION
Frequency 44 8 28 20 100
Percent 44 8 28 20 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Range Minimum Maximum Sum
Occupation
50 45 40 35 30 25 20 15 10 5 0 service Retired Business Others 8 20 28 44
Here 44 people belong to service occupation. So almost near to 50% people belong to service category. There is less availability of Retired people who are using internet banking and mobile banking as compare to other.
AGE
Age 54 31 10 5 100
Percent 54 31 10 5 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 1.66 .086 1.00 1 .855 .732 1.216 .241 3 166
Age
60 50 40 30 20 31 10 10 0 20 to 30 31 to 40 41 to 50 5 Above 50
54
In our survey I found mostly youngster means age between 20-30 people are using more internet banking and mobile banking. Above 50 age people not either using this services or not aware about this.
INCOME
Title Income Percent Valid Percent Below 10000 15001 to 25000 10000 to 15000 Above 25000 Total 16 36 13 35 100 16 36 13 35 100 16 36 13 35 100 Cumulative Percent 16 52 65 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 2.67 .112 2.00 2 1.120 1.254 -.019 .241 3 267
Income
40 35 30 25 20 15 10 5 0 Below 10000 15001 to 25000 10000 to 15000 Above 25000 16 36 35
13
Monthly income of Rs.15001-25000 and above 25000. This class people use more and more internet banking and mobile banking as a compare to other.
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 2.31 .120 2.00 2 1.203 1.448 .796 .241 4 231
Bank
50 45 40 35 30 25 20 15 10 5 0 HDFC SBI AXIS BANK ICICI BANK OF BARODA 8 27 16 6 43
In this survey I found out that, SBI account holders who are using internet banking and Mobile Banking are more as compare to other Bank. Out of 100, 27% people are using IB & MB of HDFC Bank.
Title
Frequency
Percent
Valid Percent
35 45 20
35 45 20
35 45 20
100
100
100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 2.05 .108 2.00 2 1.077 1.159 .890 .241 3 205
In our survey I found out of 100, 35 people are using Mobile banking and 45 People are using Internet banking and 20 people are using both services.
Account statement
Cheque book
Fund
Bill
ETDR/ESTDR
Tax payment
Transfer payment
61
70 60 50 40 30 20 10 0 61
23
16
25
52
28
52
23 16
25 4
28
Here people use various multiple features in Internet banking. Out of 69 People 61 People use account statement feature, 23 people use Demat account statement and so on.
FROM HOW MANY YEARS YOU ARE USING INTERNET BANKING? (All customers included, irrespective of Bank)
Title 1 year 2 year 3 year more than 3 year Total Mobile user Total
Frequency 19 13 15 18 65 35 100
Percent 19 13 15 18 65 35 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Range Minimum Maximum Sum
By showing this chart I found people are not more aware about internet banking before 3 years. And now a days people are aware gradually for this banking service.
4 1 11 15 1 2 100
4 1 11 15 1 2 100
4 1 11 15 1 2 100
70 71 82 97 98 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 3.30 .318 4.00 1 2.486 6.178 1.064 .306 10 201
45 40 35 30 25 20 15 10 5 0 1 1 4 1 39 25 11 15 1 2
From the above graph it is clear that People are mostly use internet banking for Account statement and bill payment.
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 1.55 .094 1.00 1 .754 .569 1.210 .299 3 99
38
18 7 1 Dissatisfied
In internet banking mostly all people are highly satisfied with Internet banking except only one people; only one person is dissatisfied with Internet banking
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 1.08 .034 1.00 1 .270 .073 3.220 .299 1 69
70 60 50 40 30 20 10 0 Yes 5 No 59
Out of 64 people 59 people say internet banking is safe and secure. Only 5 people give negative response.
Frequency Percent Mobile user You have antivirus software Your bank uses highly secured encryption for site You have antivirus softwear,Your bank uses highly secured encryption for site You have antivirus softwear,Your bank uses highly secured encryption for site, other Total 39 4 45 39.0 4.0 45.0
11
11.0
11.0
99.0
1.0
1.0
100.0
100
100.0
100.0
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 2.34 .117 2.00 2 .911 .830 1.303 .306 4 143
50 45 40 35 30 25 45 20 15 10 5 0 4 you have antivirus software 11 1 Your bank uses highly you have antivirus you have antivirus secured encryption for softwear,Your bank uses softwear,Your bank uses site highly secured encryption highly secured encryption for site for site, other
Out of 61 respondents who said yes in the above question, 45 respondents said bank uses highly secured encryption for site.
Balance Inq. 79
Acc. Transfer 16
Bill payment 28
other 18
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum
90 80 70 60 50 40 30 20 31 10 0 Balace Inq. Email & Text Aert Order cheque book Acc. Transfer Bill payment other 25 16 28 18 79
In mobile banking mostly balance inquiry feature people are use. And other feature are use equally and less as a compare to balance inquiry feature.
Title
Frequency
Percent
Valid Percent
Cumulative Percent 50
50
50
50
43 7 100
43 7 100
43 7 100
93 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 1.14 .050 1.00 1 .351 .123 2.140 .337 1 57
50 45 40 35 30 25 20 15 10 5 0 yes no 7 43
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 1.31 .088 1.00 1 .619 .384 2.441 .340 3 64
37
Here testing satisfaction level of customer for mobile banking. Mostly all people are highly satisfied with mobile banking. Only one person not satisfied with mobile banking.
Title
Frequency
Percent
Valid Percent
50 47 3 100
50 47 3 100
50 47 3 100
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum
50 45 40 35 30 25 20 15 10 5 0 yes 3 no 47
Mobile banking is safe and secure? 47 people give a positive response for mobile banking is safe and secure. Only 3 people give a negative response.
Title Internet user You have highly secured mobile your bank uses highly secured encryption for site You have highly secured mobile, your bank uses highly secured encryption for site Total
Valid Cumulativ Percent e Percent 50.0 50.0 6.0 38.0 6.0 56.0 94.0 100.0
100
100.0
100.0
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 2.12 .109 2.00 2 .773 .598 1.444 .337 3 106
40 35 30 25 20 15 10 5 6 0 You have highly secured mobile your bank uses highly secured You have highly secured encryption for site mobile,your bank uses highly secured encryption for site 6 38
Out of 50 respondents who said yes in the above question, 38 respondents said bank uses highly secured encryption for site.
STATISTICS
Mean Std. Error of Mean Median Mode Std. Deviation Variance Skewness Std. Error of Skewness Range Sum 1.54 .084 1.50 1 .582 .339 .508 .343 2 74
(1)
H0: There is a negative relationship between satisfaction with internet banking and mobile banking. H1: There is a positive relationship between satisfaction with internet banking and mobile banking. Correlations Are you satisfied with internet banking service provided by your bank? Are you satisfied with internet banking service provided by your bank? Are you satisfied with mobile banking service provided by your bank? Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N 64 .674** .008 14 49 1 Are you satisfied with mobile banking service provided by your bank? .674** .008 14 1
Here there is a positive relationship between satisfaction of internet banking and mobile banking.
(2)
H0: There is a negative relationship between Age and use of banking service. H1: There is a positive relationship between Age and use of banking service.
Correlations Age Which banking service you are using? .172 .087 100 .172 .087 100 100 100 1
Age
Here, there is a positive relationship between Age and which banking service you are using. So, H1 hypothesis is accepted.
CHAPTER: 8 FINDINGS
One possible reason is that since Internet banking in Ahmedabad is relatively new, most Internet users have yet to try it. As a result, they are unable to effectively assess the complexity of using such systems and the influence that such complexity may have on their intentions.
Ideally, the Internet bank should not be charging any fees for similar services that are free-of-charge in the physical world. However, certain transactions, such as check cancellations and wire transfers, would still require administrative charges.
The findings of this study also hold important practical implications for banks that are currently offering Internet banking services as well as banks that are planning to offer such services. For example, in promoting Internet banking, since potential adopters are found to rely more on their own efforts to search for information rather than rely on referent groups.
RECOMMENDATIONS:
Security Infrastructure: PKI is the most favored technology for secure Internet banking services. However, it is not yet commonly available. While PKI infrastructure is strongly recommended, during the transition period, until IDRBT or Government puts in place the PKI infrastructure, the following options are recommended. 1. Usage of SSL, which ensures server authentication and the use of client side certificates issued by the banks themselves using a Certificate Server. 2. The use of at least 128-bit SSL for securing browser to web server communications and, in addition, encryption of sensitive data like passwords in transit within the enterprise itself.
To boost confidence and enhance self-efficacy in using Internet banking services, demonstrations via video presentations could be made at bank branches to showcase the user-friendliness of such services. Such initiatives will help customers to be more familiar with the bank and its Internet banking service, an important criterion in helping potential adopters select the Internet bank.
Since the cost of operating Internet banking services is low, Internet banks should look for opportunities to lower the charges and transfer the cost savings to customers. Emphasizing the lower charges for online transactions as one of the key benefits should be a feature of promotional efforts.
Increasing usage of mobile phones is going to revolutionize the banking culture in near future: - Mobile banking is also getting popular in the segment of internet banking thus this can add some more steps to progress for SBI. Bank is into the mobile banking but it is providing limited features.
CONCLUSION:
Internet banking and Mobile Banking is changing the banking industry and is having the major effects on banking relationships. The net banking, thus, "now are more of a norm rather than an exception in many developed countries" due to the fact that it is the economical way of providing banking services. Banking is now no longer confined to the traditional brick and mortar branches, where one has to be at the branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. There is need to scan and analyze the market and respond to the needs of customers and to generate awareness regarding advantages of internet banking.
In true Internet banking, and Mobile banking any transaction is safe and secure. Internet banking and Mobile banking all inquiry is processed online without any reference to the branch (anywhere banking) at any time. Providing internet banking and Mobile banking is increasingly becoming a 'need to have' than a 'nice to have' services.
CHAPTER: 10 ANNEXTURE
10.1 QUESTIONNAIRE
Dear Sir/Madam,
I am a MBA student and as a part of my Summer Internship Program I am conducting a research. I solicit your valued cooperation for the same, with an assurance that all the information, provided by you, will remain confidential. Your participation in this survey is greatly appreciated. Subject: Internet Banking and Mobile Banking Safe and Secure Banking
1. Name: _______________________________________________
3. Age: 20 to 30 31 to 40 41 to 50 Above 50
6. Which banking service you are using? Mobile Banking Internet Banking None of Above
8. From how many years you are using Internet Banking. 1 Year 2Year 3 Year More than 3 year
9. What are the reasons for choosing Internet banking service? Convenience Safe and secure To save time other (please specify) _____________
10. Which online features do you use regularly? ______________________________________________________________ 11. Are you satisfied with Internet Banking service provided by your bank? Highly satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied
12. Do you believe that Internet banking is safe and secure? Yes No 13. If yes, Why? You have Antivirus software Your bank uses highly secured encryption for site Other (Please specify) ____________________ 14. If yes, which types of special security features are provided? ____________________________________________________.
15. Which of the following mobile banking features do you use? Balance inquiry Internal account transfer Email and text alerts Utility bill payment Order check books Other
16. .Do you still visit your branch since you started using mobile banking? Yes No N/A
17. Are you satisfied with Mobile Banking service provided by your bank? Highly satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied
18. Do you believe that Mobile banking is safe and secure?? Yes No
19. If yes, Why? You have highly secured Mobile Your bank uses highly secured encryption for site Other (Please specify) ____________________
20. Your rating for Mobile Banking. Very Useful Useful Somewhat Useful Not Useful
10.2 BIBLIOGRAPHY
Websites:
www.rbi.org.in www.onlinesbi.com www.sbi.co.in www.icicibank.com http://mobile.onlinesbi.com/sbidownloader/populate.action http://www.sbicard.com/services_for_you/sbi_mobile_banking_0_091443.html www.hdfcbank.com www.bankofbaroda.com http://www.axisbank.com/business-banking/speed-banking/axis-mobile/terms-and-conditions.aspx http://www.business-standard.com/india/news/rbi-unveils-net-banking-norms/92693/ economictimes.indiatimes.com/state-bank-of-India/infocompany www.onlinebanksguide.com corporatelawsforindia.blogspot.com