ACKNOWLEDGEMENT

I wish to express my sincere gratitude to Mrs. Singh Mam principal of Joshi Bedekar College for providing me an opportunity to do my project work on INTERNET BANKING OF STATE BANK OF INDIA. This project bears on imprint of many peoples. I sincerely thank to my project guide Mr. Yogesh Sharma sir, for guidance and encouragement in carrying out this project work. I also wish to express my gratitude to the officials and other staff members of STATE BANK OF INDIA who rendered their help during the period of my project work. My special thanks to Mr. Bamble the manager of State Bank of India for their kind co-operation to the completion of my project work. Last but not least I wish to avail myself of this opportunity, express a sense of gratitude and love to my friends and my beloved parents for their manual support, strength, help and for everything.

EXECUTIVE SUMMARY:
Internet banking has evolved over the last decade from product brochure ware, to a complete financial marketplace for its online customers. Banks see Internet banking as the key channel for growth and customer retention. As such, the online banking model has moved from tactical and lower cost customer service, to a more strategic form of customer engagement. Many banks have adopted the latest technologies and added new Internet banking functionalities and features to stay ahead of the competition. However, when measured by key performance indicators such as customer growth, revenue growth, etc., the value delivered varies from bank to bank. While some banks achieve better customer response and retention from adding new technology/feature bells and whistles, others have received moderate to poor acceptance, which has undermined their return on investment. The challenge is to find the right approach and leverage the right mix of technology and features that keep customers happy and transacting over an extended period of time.

INDEX Sr. no Topic

Pg. no. 7 8 8 9 11 12

Chapter 1 Internet banking 1.1 1.2 1.3 1.4 1.5 Introduction to Internet banking History of Internet banking Development of Internet banking in India Various forms of E-banking Advantages & Disadvantages of Internet banking

Chapter 2 State bank of India 2.1 2.2 2.3 History of State Bank of India Internet banking at State bank of India Changes brought in information

15 16 17 18

technology by SBI 2.4 Internet banking facility through state bank of India 2.5 2.6 Services provided by SBI Internet banking Products & services
20 22 19

Chapter 3 SWOC analysis & Terms of service of online banking

32

3.1 3.2 3.3 3.4 3.5 3.6 3.7

General information Security Banks terms Customers obligation Dos & Donts Internet banking risks Types of security threats in online banking

34 35 36 37 37 36 42

Chapter 4 Data analysis & interpretation

44

Chapter 5 Recommendation & suggestion Chapter 6 Conclusion Bibliography Annexure

54 56 58 59

Sr. no. Graph name 2.3 4.1 4.2 4.3 4.4 4.5 Use of internet banking from last few years Total use of internet banking Preference for online shopping No. of users of banks Facilities provided by bank Source of net banking

Pg no.
11 46 46 47 48 49

RESEARCH METHODOLOGY

OBJECTIVES
The main objectives of the study are: To understand the concept of Internet banking and importance, to bank

as well as customers. To get aware of various aspects of net banking To build up SWOC analysis of Internet banking of SBI To build up various solutions for drawbacks in net banking

SCOPE OF STUDY
The study is made taking consideration of whole State Bank of India. With reference to experience availed at Amravati camp branch.

NEED OF THE STUDY

This study is needed to find out the working of Internet Banking of SBI and its importance to customer as well as to bank.

RESEARCH DESIGN:
particulars Number of sample Name of sampling Data 30 Random/ probability

DATA COLLECTION
Primary Data: The data is to be collected from Manager of SBI, Mr. Bamble and other staff members at SBI bank. E-circulars of SBI Secondary Data: Books and magazines Database at SBI Internal reports of the banks Library research Websites

FUTURE SCOPE
The study of this topic will help to get the knowledge about process of internet banking and usefulness to banking industry. As the study contains the 360 degree information regarding SBI and its internet banking, Hence the study will lead to new ways to tackle the problems and the SWOC of SBI in respect of internet banking. This was all about how the project will go ahead and the findings from it.

CHAPTER 1 INTRODUCTION TO INTERNET BANKING

1.1

INTERNET BANKING (E-BANKING): INTRODUCTION

Internet banking (or E-banking) means any user with a personal computer and a browser can get connected to his banks website to perform any of the virtual banking functions. In internet banking system the bank has a centralized database that is web-enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interaction is dictated by the nature of service. Once the branch offices of bank are interconnected through terrestrial or satellite links, there would be no physical identity for any branch. It would a borderless entity permitting anytime, anywhere and anyhow banking. The delivery channels include direct dialup connections, private networks, public networks, etc. with the popularity of computers, easy access to Internet and World Wide Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their customers. This form of banking is generally referred to as Internet Banking.

1.2 HISTORY
The concept of Internet banking has been simultaneously evolving with the development of the World Wide Web. Programmers working on banking data bases came up with ideas for online banking transactions, sometime during the 1980's. The creative processes of development of these services were probably sparked off after many companies started the concept of online shopping. The online shopping promoted the use of credit cards through Internet. Many banking organizations had already started creating data ware housing facilities to ease their working staffs. The development of
8

these data bases were widely used during the development of ATM's. The first online banking service in United States was introduced, in October 1994. The service was developed by Stanford Federal Credit Union, which is a financial institution. The online banking services are becoming more and more prevalent due to the well developed systems. Though there are pros and cons of electronic cash technology, it has become a revolution that is enhancing the banking sector.

1.3 DEVELOPMENT OF INTERNET BANKING IN INDIA

The concept of Internet banking has been simultaneously evolving with the development of the World Wide Web.

Programmers working on banking data bases came up with ideas for online banking transactions, sometime during the 1980's.

The online shopping promoted the use of credit cards through Internet. The first online banking service in United States was introduced, in October 1994.

The online banking services are becoming more and more prevalent due to the well developed systems

ICICI was the first bank to initiate the Internet banking revolution in India as early as 1997 under the brand name

ICICI Bank kicked off online banking way back in 1996. But even for the Internet as a whole, 1996 to 1998 marked the adoption phase, while usage increased only in 1999- due to lower ISP online charges, increased PC penetration and a tech-friendly atmosphere

Use of internet banking from last few years

60 50% 50 40% 40 32% 30 20% 20 12% 10 0 9% 15% 25% 2002 2003 2004 2005 2006 2007 2008 2009

Although, the growth shows a healthy 10 10% % increase from 2008 to 2009 from 57 7 million users to 71 million Internet users, in larger perspective this is really nothing to boast of. To put things in perspective, we are adding close to 15 million mobile users on average in a month, while in case of Internet it is 14 million users a year.

1.4 VARIOUS FORMS OF E E-BANKING: a. INTERNET BANKING:

Internet banking can be used from the home or the office, as well as an internet caf, although the latter is not recommended for security reasons. In order to handle his account a user just needs an internet browser.

10

b. CREDIT CARDS: The credit card enables the cardholders to: Purchase any item like clothes, jewellery, railway/air tickets, etc. Pay bills for dining in a restaurant or boarding and lodging in hotel. Avail of any service like car rental, etc.

c. DEBIT CARDS: A debit card is issued on payment of a specified amount by the issuing company like a telephone company to a customer on cash payment or on debiting his account by a bank. Thus it is like an electronic purse, which can be read and debited by the required amount. It may be noted that while through a credit card, the customer first makes a purchase or avails service and pays later on, but for getting the debit card, a customer has to first pay the due amount and then make a purchase or avail the service. For this reason, debit card are not as popular as credit cards.

d. SMART CARDS: Smart Cards have a built-in microcomputer chip, which can be used for storing and processing information. For example, a person can have a smart card from a bank with the specified amount stored electronically on it. As he goes on making transactions with the help of the card, the balance keeps on reducing electronically. When the specified amount is utilized by the customer, he can approach the bank to get his card validated for a further specified amount. Such cards are used for paying small amounts like telephone calls, petrol bills, etc.

11

e. ATM CARDS: The card contains a PIN (Personal Identification Number) which is selected by the customer or conveyed to the customer and enables him to withdraw cash up to the transaction limit for the day. He can also deposit cash or cheque.

1.5 ADVANTAGES & DISADVANTAGES OF INTERNET BANKING: Advantages of Internet Banking

Internet Banking has several advantages over traditional banking which makes operating a bank account simple and convenient. Internet banking allows you to conduct various transactions using the bank's website and offers several advantages. Some of the advantages of internet banking are:

Internet banking account is simple to open and easy to operate. Internet banking is quite convenient as you can easily pay your bills, can transfer funds between accounts, etc. Now you do not have to stand in a queue to pay off your bills; also you do not have to keep receipts of all the bills as you can now easily view your transactions.

Internet banking is available all the time, i.e. 24x7. You can perform your tasks from anywhere and at any time; even in night when the bank is closed or on holidays. The only thing you need to have is an internet connection.

12

Internet banking is fast and efficient. Funds get transferred from one account to the other very fast. You can also manage several accounts easily through internet banking.

Through Internet banking, you can keep an eye on your transactions and account balance all the time. This facility also keeps your account safe. This means that by the ease of monitoring your account at anytime, you can get to know about any fraudulent activity or threat to your account before it can pose your account to severe damage.

Internet banking is also a great medium for the banks to endorse their products and services. The services include loans, investment options, and many others.

Disadvantages of internet banking

Understanding the usage of internet banking might be difficult for a beginner at the first go. Though there are some sites which offer a demo on how to use internet banking, but all does not offer this facility. So, a person who is new to internet baking might face some difficulty.

You cannot have access to internet banking if you dont have an internet connection; thus without the availability of internet access, internet banking may not be useful.

Security of transactions is a big issue. Your account information might get hacked by unauthorized people over the internet.

13

Password security is a must. After getting your net banking password, do change it and memorize it otherwise your account may be misused by someone who gets to know your password inadvertently.

You cannot use internet banking, in case; the banks server is down. Another issue is that sometimes it becomes difficult to note whether your transaction was successful or not. It may be due to the loss of internet connectivity in between, or due to a slow connection, or the banks server is down.

14

CHAPTER 2 STATE BANK OF INDIA

15

STATE BANK OF INDIA

State bank of India is the nations largest and oldest bank. Tracing its roots back some 200 years to the British East India Company (and initially established as the Bank of Calcutta in 1806), the bank operates more than 15,000 branches within India, where it also owns majority stakes in six associate banks. State Bank of India (SBI) has more than 80 offices in nearly 35 other countries, including multiple locations in the US, Canada, and Nigeria. The bank has other units devoted to capital markets, fund management, factoring and commercial services, credit cards, and brokerage services. The Reserve Bank of India owns about 60% of State bank of India.

2.1 HISTORY OF STATE BANK OF INDIA:The History of State Bank Of India dates back to the first decade of the nineteenth century with the setting up of Bank of Calcutta in Calcutta on 2 June 1806.After three years it was renamed as Bank Of Bengal (2 January 1809).On 15th April 1840, the Bank of Bombay was initiated and on 1st July 1843, the Bank of Madras was established. The integration of the three banks resulted in the creation of Imperial Bank of India on 27th January1921. Structure and Organization The Banks Corporate Office is located at Mumbai. Its domestic operational area is divided into 14 Circles, each with one Local Head Office and a few Zonal and Regional Offices. The Bank is present not just in the major metropolises of India but has wide reach in the villages of India. The Bank's
16

top management consists of the Chairman, group executives for National Banking Group, Corporate Banking Group, International Banking Group and Associates & Subsidiaries, and four staff functionaries in charge of finance, credit, human resources & technology management and inspection & audit. Transformation in SBI The SBI has undergone major transformation in the recent years. The bank has ventured into new areas of business like Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point Of Sale, Merchant Acquisition, Advisory Services, and Structured Products etc. The bank foresees tremendous growth potential in all these areas.

2.2 INTERNET BANKING AT STATE BANK OF INDIA

The Internet Banking service provided by State Bank of India is referred to as OnlineSBI by the bank. OnlineSBI is regarded as the Internet banking portal for SBI. The portal offers anywhere, anytime, online access to banking services for SBIs retail and corporate customers. OnlineSBI is developed by using advanced technology and tools. The infrastructure is robust and supports secure access to banking services for more than 13,000 branches across India. OnlineSBI is made for all the customers who have an account at an internet enabled branch of SBI. Customers with account with internet enabled branch require to get registered for the Internet banking service with the branch. In
17

case the customers branch is not internet enabled, he can transfer his existing account from his branch to an OnlineSBI branch. Apply for OnlineSBI (Internet Banking) In order to apply for OnlineSBI Online Banking, customers can visit the site at http://www.onlinesbi.com and download the application form for Online Banking. The form can also be obtained from the branch. After completing the application form, it can be submitted to any nearest branch of the bank. On successful processing of the application, customer will receive User Id, Login Password and Transaction password. Customer can login to net banking site of OnlineSBI using the UserID and login password. Once logged in customer can avail many online banking services offered by Bank and perform various financial transactions. The User Id & Passwords for login to the OnlineSBI will be sent to the registered address of customer with the Bank. Customer should ensure that his current address is updated in the Banks record. It is suggested that new customers should completely read the general information page so that they will get the idea of using the various banking services online. It is very easy to conduct all the banking transactions online. It is useful for those who are unfamiliar with online banking service.

2.3

CHANGES

BROUGHT

IN

INFORMATION

TECHNOLOGY BY SBI: In the next decade internet facility was provided for individuals All SBI branches were connected and ATMS were launch
18

2001 - KMPG appointed consultant for preparing IT Plan for the Bank. Later on Core banking proposed by the IT consultancy company. 2002 All branches computerized but on decentralized systems, there

the initiative of core banking took place 2008- more than 6500 branches (95% of business) on Core

Banking Solution (CBS) Internet Banking facility for corporate customers were also launched in early 2008 More Interfaces developed with e-Commerce & other sites through

alternate channels like ATM & Online Banking All Foreign Offices were brought on Centralized Solution Large network is playing the role of backbone for connectivity across the

country. Multiple Service Providers are providing the links BSNL, MTNL, Reliance, Tata & reliance which are making the system errorless and provide high speed. Multiple Technologies to support the networking infrastructure Leased

lines, Dial-up, CDMA & VSAT

2.4 INTERNET BANKING FACILITY THROUGH STATE BANK OF INDIA:

1. 2. 3. 24x7 facilities for tax payment through SBI e-Tax. Fund transfer between his own accounts. Access of accounts on real time 24x7x365 basis and downloading of

account statements. 4. 5. Transfer of fund to other accounts through third party transfer mode. Transfer of funds to PPF and loan accounts
19

Payment of all kind of utility bills like Telephone bill payment. Credit

card payment LIC premium payment, Mutual f\Fund Payment, Electricity bill payment Mobile bill payments etc listed on the site. 7 8. 9. 10 Booking of Railway and Air tickets online Payments of Taxes viz Direct and indirect tax. Transfer of money to any VISA Debit or Credit Card. Online trading of shares by using 3 in 1 accounts.

2.5 SERVICES PROVIDED BY SBI INTERNET BANKING 1. RETAIL BANKING:The Retail banking application is an integration of several functional areas, and enables customers to: Issue Demand Drafts online Transfer funds to own and third party accounts Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature Generate account statements Setup Standing Instructions Configure profile settings

Use eTax for online tax payment Use ePay for automatic bill payments Interface with merchants for railway and airline reservations Avail DEMAT and IPO services

20

2. CORPORATE BANKING:The OnlineSBI corporate banking application provides features to administer and manage corporate accounts online. The corporate module provides roles such as Regulator, Admin, Uploader, Transaction Maker, Authorizer, and Auditor. These roles have access to the following functions: Manage users, define rights and transaction rules on corporate accounts. Access accounts in several branches with a single sign-on mechanism Upload files to make bulk transactions to third parties, supplier, vendor and tax collection authorities. Use online transactional features such as fund transfer to own accounts, third party payments, and draft issues Make bill payments over the Internet. Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user Generate account statement Enquire on transaction details or current balance

3. VALUE ADDED SERVICES:

Tax payments to central and state governments through site to site integration. Supply Chain Finance( e-VFS- Electronic Vendor Finance Scheme) Direct Debit Facility E Collection Facilities for: Core Banking Transactions Internet Bank transactions for incoming RTGS/NEFT Transactions Internet banking transactions for SBI and associate banks
21

Debit facility where suppliers can directly debit their customers account through internet banking

2.6 PRODUCTS AND SERVICES:1) E-ticketing:

You can book your railway, air and bus tickets online through online SBI. To book your train ticket, just log on to irctc.co.in and create an ID there at if you do not have one. Submit your travel plan and book the ticket(s)-either i-ticket or E-tickets (wherein after successful payment transactions, an e-ticket is generated which can be printed any time. For an e-ticket, the details of photo identity card will required to be filled in) And select State Bank of India in the payment options. You will be redirected to Internet Banking site of SBI (www.onlinesbi.com). After submitting the respective ID and password, you can select your account. After a successful debit, Railways will generate the ticket. E-ticket can be printed by you whereas the i-ticket will be dispatched by IRCTC at the given address. Service charges @ Rs.10/- per transaction shall be levied in addition to the cost of the ticket. Cancellation of E-ticket can be done by logging on to IRCTC's site; refund amount will be credited to your account directly within 2-3 days. For cancellation of i- ticket, you shall be required to submit your ticket at a computerized counter of Railways and on cancellation; the amount shall be credited back to your account. You can also book your Air ticket through the e-ticketing feature. Logon to Indian Airlines website to make a payment for an e- ticket through State Bank of India, you need to select SBI as the payment option. The payment request
22

will be redirected to Internet Banking site. The request may be processed based on values sent from the airlines website. Once a transaction is processed, an appropriate response will be sent to airlines site to update the status of the transaction. You can print the E-ticket immediately. To book bus tickets to destinations in Karnataka, log on to the KSRTC website. Provide details about the start and end points of your journey, date of journey and number of tickets. Verify availability of seats on the selected date and confirm the transaction. Select OnlineSBI to make the payment. Provide your credentials and select the SBI account that will be debited for the payment. You are provided a KSRTC reference number for your eTicket.

2) SBI e-tax:You can pay your taxes online through SBI E-Tax. This facility enables you to pay TDS, Income tax, Indirect tax, Corporation tax, Wealth tax, Estate Duty and Fringe Benefits tax. Click the e-Tax link in the home page. You are displayed a page with two links Direct Tax and Indirect Tax. Click the Direct Tax link. You will be redirected to the NSDL site where you can select an online challan based on the tax you wish to pay. Provide the PAN, name and address, assessment year, nature of payment and bank name. On selecting the bank name as SBI and submitting the form, you will be redirected to the Internet Banking site. After submitting the respective ID and password, you can select your account for making payment of taxes. After payment is successful you can print the E-Receipt for the payment. The E-receipt can be printed at a later date also and the same can be retrieved from: Enquiries > Find Transactions > Status Enquiries > Click on
23

the

respective

transaction

to

print

the

tax

receipt.

The Indirect Tax link is used to make Central Excise and Service Tax payments to Central Board of Excise and Customs. The online payment feature facilitates anytime, anywhere payment and an instant E-Receipt is generated once the transaction is complete. The Indirect Tax payment facility is available to Registered Central Excise/Service Tax Assessee who possesses the 15 digit PAN based Assessee Code. You can make CBEC payments using the Indirect Taxes link available in the Payments/Transfers tab. You need to provide your Assessee code as registered with CBEC and select the minor heads towards which you intend to pay tax. Select the appropriate tax type and enter the tax amount. Select an account for debiting the total tax amount. You can use any of your transaction accounts to make the payment. If a payment is successful, CBEC provides a link to generate an E-Receipt for the payment.

3) Bill payment:
A simple and convenient service for viewing and paying your bills online. Using the bill payment you can view and Pay various bills online, directly from your SBI account. You can pay telephone, electricity, insurance, credit cards and other bills from the comfort of your house or office, 24 hours a day, 365 days a year. Simply logon to https://www.onlinesbi.com/ with your credentials and register the biller to which you want to pay, with all the bill details. Once the bill is uploaded by the biller, you can make payment online. You can see 'how do i' to learn the steps for using the facility.

24

4) RTGS/NEFT:You can transfer money from your State Bank account to accounts in other banks using the RTGS/NEFT service. The RTGS system facilitates transfer of funds from accounts in one bank to another on a "real time" and on "gross settlement" basis. This system is the fastest possible interbank money transfer facility available through secure banking channels in India. RTGS transaction requests will be sent to RBI immediately during working hours post working hours requests are registered and sent to RBI on next working day. You can also schedule a transaction for a future date. You can transfer an amount of Rs.1 lac and above using RTGS system. National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with the other participating bank. RBI acts as the service provider and transfers the credit to the other bank's account.

5) eZtrade@sbi
State Bank of India (SBI) in alliance with Motilal Oswal Securities Limited and SBI Caps Securities Limited (SSL) now introduces you to 'eZtrade@sbi', a State-of-the-Art online trading platform predominantly to cater to every trading need (presently available to Indian Residents Only) and offers a truly world class experience of online investing - anyplace, anytime. This service provides you with a 3-in-1 account which is an integrated platform of Bank Account, Demat Account and an Online Trading Account to give you a convenient and paper free trading experience under one roof. We provide online trading of shares of Companies listed on BSE and NSE. eZtrade@sbi will let you trade from the comfort of your home or office through the Internet. Buying and selling of shares is now just a click
25

away. So go ahead and enjoy your fast, easy and hassle-free online shares/securities trading experience with India's Largest Bank.

6) E-payment:You can pay your insurance premium, mobile phone bills and also you can purchase mutual fund units by coming from the billers website and selecting state bank of India in the payment option. LIC PREMIUM: For paying premium of LIC policy logon to premium is due select State Bank of India in the make payment option. SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon towww.sbi mf.com and select the scheme in which you want to make investment in the payment option select State Bank of India. CCAVENUES: Enjoy shopping at the CCAvenue Shopping Mall and purchase from a wide variety of products and services through CCAvenue Certified Vendors. Make payments for your purchases using your Internet enabled SBI accounts.

7) Fund transfer:The Funds Transfer facility enables you to transfer funds within your accounts in the same branch or other branches. You can transfer aggregating Rs.1 lac per day to own accounts in the same branch and other branches. To make a funds transfer, you should be an active Internet Banking user with transaction rights. Funds transfer to PPF account is restricted to the same branch.

26

Just log on to retail section of the Internet Banking site with your credentials and select the Funds Transfer link under Payments/Transfers tab. You can see all your online debit and credit accounts. Select the debit account from which you wish to transfer funds and the credit account into which the amount is to be credited. Enter the amount and remarks. The remarks will be displayed in your accounts statement for this transaction. You will be displayed the last five funds transfer operations on your accounts. On confirming the transaction, you will be displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds transfer request. A reference number will be generated for your record.

8) Third party transfer :You can transfer funds to your trusted third parties by adding them as third party accounts. The beneficiary account should be any branch SBI. Transfer is instant. You can do any number of Transactions in a day for amount aggregating Rs.1lakh. To transfer funds to third party having account in SBI, you need to add and approve a third party, you need to register your mobile number in personal details link under profile section. You will receive a One Time SMS password on your mobile phone to approve a third party. If you do not have a mobile number, third party approval will be handled by your branch. Only after approval of third party, you will be able to transfer funds to the third party. You can set limits for third party transactions made from your accounts or even set limits for individual third parties.

27

9) Demand Draft :The Internet Banking application enables you to register demand drafts requests online. You can get a demand draft from any of your Accounts (Savings Bank, Current Account, Cash Credit or Overdraft). You can set limits for demand drafts issued from your accounts or use the bank specified limit for demand drafts.

You can opt to collect the draft in person at your branch, quoting a reference to the transaction. A printed advice can also be obtained from the site for your record. Alternatively, you may request the branch to courier it to your registered address, and the courier charges will be recovered from you. If you have any queries, kindly approach your branch, quoting the reference number generated for the request.

10)

Cheque Book Request :-

You can request for a cheque book online. Cheque book can be requested for any of your Savings, Current, Cash Credit, and Over Draft accounts. You can opt for cheque books with 25, 50 or 100 cheque leaves. You can either collect it from branch or request your branch to send it by post or courier. You can opt to get the cheque book delivered at your registered address or you can provide an alternate address. Cheque books will be dispatched within 3 working days from the date of request. Just log on to retail section of the Internet Banking site with your credentials and select the Cheque Book link under Requests tab. You can view all your transaction accounts. Select the account for which you require a cheque

28

book; enter the number of cheque leaves required and the mode of delivery. Then, submit the same.

11) Account Opening Request:OnlineSBI enables you to open a new account online. You can apply for a new account only in branches where you already have accounts. You should have an INB-enabled account with transaction right in the branch. Funds in an existing account are used to open the new account. You can open Savings, Current, Term Deposit and Recurring Deposit accounts of Residents, NRO and NRE types. Just log on to retail section of the Internet Banking site with your credentials and select the New Account link under Requests tab. You can see all types of accounts. Select the account and account type you wish to open and submit the same. Then, you need to select the branch and enter the initial amount to open the account. You can select any of your accounts for debiting the initial amount. Then, submit the transaction. Your new account opening request will be processed by the branch.

12)

Account Statement :-

The Internet Banking application can generate an online, downloadable account statement for any of your accounts for any date range and for any account mapped to your username. The statement includes the transaction details, opening, closing and accumulated balance in the account. You can generate the online account statement for any date range or for any month and year. The account statement can be viewed online, printed or downloaded as an Excel or PDF file. You also have the option to select the
29

number of records displayed in each page of the statement. The options are 25, 50, 75, 100 and ALL.

13)

Transaction Enquiry :-

OnlineSBI provides features to enquire status of online transactions. You can view and verify transaction details and the current status of transactions. Your VISA transactions can also be viewed separately. Just log on to retail section of the Internet Banking site with your credentials and select the Status Enquiry link under the Enquiries tab. You will be displayed all online transactions you have performed. To view details of individual transactions, you need to click the Transaction Reference number link. You are displayed the debit and credit account details, transaction amount, narration and transaction status

14)

Demat Account Statement:-

OnlineSBI enables you to view Demat account statement and maintain such accounts. The bank acts as your depository participant. In the third party site, you can mark a lien on your Demat accounts and use the funds to trade on stock using funds in your SBI savings account. You can view Demat account details, and generate the following statements: statement of holding, statement of transactions, statement of billing.

15)

Donation:-

You can make donation to religious and charitable institution by using Internet Banking of SBI. Simply log on to http://www.onlinesbi.com/ with your credentials and go to Payment and transfer and click on make donation
30

link. After selecting the debit account select the religious/charitable institution whom you want to offer donation. After successful payment you can print an E-receipt for the donation made

31

CHAPTER 3 SWOC ANALYSIS & TERMS OF SERVICE OF ONLINE BANKING

32

STRENGTHS: Greater reach to customers Quicker time to market Ability to introduce new products and services quickly and successfully Ability to understand its customers needs Customers are given access to information easily across any location Greater customer loyalty Easy online application for all accounts, including personal loans and mortgage 24 hours account access Quality customer service with personal attention

WEAKNESSES: Lack of awareness among the existing customers regarding internet banking Obsolesce of technology take place very soon specially in terms of

security on internet. Procedure for applying for id and password for using services related to

internet banking takes time. Lack of knowledge is found regarding internet banking in employees of

SBI Implementation of newer technology is little bit complicated

Employees needs training to obtain knowledge regarding I-banking

33

OPPORTUNITIES: Approximately 95% of customers are not using internet banking. Core competency can be achieved in terms of banking if focus is made

on awareness of internet banking Can become 1st virtual bank of India. Concentration of various services should be made using internet banking

CHALLENGES: Maintaining Business Edge over competitors in the context of sameness in IT infrastructure Multiple vendor support is necessary for working of highly complex

technology Maintaining secured IT infrastructure for business operations

Alternative must be there in case of failure of system

TERMS OF SERVICE: ONLINE SBI 3.1 GENERAL INFORMATION:

1. You should register for OnlineSBI with the branch where you maintain the account. 2. If you maintain accounts at more than one branch, you need to register at each branch separately. 3. Normally OnlineSBI services will be open to the customer only after he acknowledges the receipt of password.

34

4. We invite you to visit your account on the site frequently for transacting business or viewing account balances. If you believe that any information relating to your account has a discrepancy, please bring it to the notice of the branch by e-mail or letter. 5. In a joint account, all account holders are entitled to register, as users of OnlineSBI, but transactions would be permitted based on the account operation rights recorded at the branch. (To begin with the services will be extended only to single or Joint E or S accounts only). 6. All accounts at the branch whether or not listed in the registration form, will be available on the OnlineSBI. However the applicant has the option to selectively view the accounts on the OnlineSBI.

3.2 SECURITY:
1. The Branch where the customer maintains his account will assign: a) User-id & b) Password 2. The User-id and Password given by the branch must be replaced by User Name and Password of customers choice at the time of first log-on. This is mandatory. 3. 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
35

 You are dealing with SBI at that moment. The two-way communication is secured with 128-bit SSL encryption technology, which ensures the confidentiality of the data during transmission. 4. These together with access control methods designed on the site would afford a high level of security to the transactions you conduct. SBI will soon be implementing PKI/Digital Signature. 5. You are welcome to access OnlineSBI from anywhere anytime. However, as a matter of precaution, customers may avoid using PCs with public access. 6. There is no way to retrieve a password from the system. Therefore if a customer forgets his password, he must approach the branch for reregistration.

3.3 BANKS TERMS:

1. All requests received from customers are logged for backend fulfillment and are effective from the time they are recorded at the branch. 2. Rules and regulations applicable to normal banking transactions in India will be applicable mutatis mutandis for the transactions executed through this site. 3. The OnlineSBI service cannot be claimed as a right. The bank may also convert this into a discretionary service anytime.

36

4. 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. 5. The Bank reserves the right to modify the services offered or the Terms of service of OnlineSBI. The changes will be notified to the customers through a notification on the Site.

3.4 CUSTOMERS OBLIGATIONS:

1. 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. 2. 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. 3. The customer will not attempt or permit others to attempt accessing the OnlineSBI through any unlawful means.

3.5 DOS & DONTS:

1. The customer should keep his/her 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.
37

2. The customer is free to choose a password of his own for OnlineSBI services. As a precaution a password that in is generic 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. 3. It may not be safe to leave the computer unattended during a valid session. This might give access to your account information to others.

3.6 INTERNET BANKING RISKS:

CREDIT RISK: Credit risk is the risk to earnings or capital arising from
an obligator's failure to meet the terms of any contract with the bank or otherwise to perform as agreed. Credit risk is found in all activities where success depends on counterparty, issuer, or borrower performance. It arises any time bank funds are extended, committed , invested or otherwise exposed through actual or implied contractual agreements , whether on or off the banks balance sheet.

INTEREST RATE RISK: Internet rate risk is the risk to earnings or

capital arising from movements in interest rates. Interest rate risk arises from different between the timing of rate changes and timing of cash flows. Internet banking can attract deposits, loans and other relationships from a large pool of possible customers than other forms of marketing. Greater access to customers who primarily seek the best rate or term reinforces the

38

need for managers to maintain appropriate asset/liability management systems, including the ability to react quickly to changing market conditions.

LIQUIDITY RISK: Liquidity risk is the risk to earnings or capital

arising from a bank's inability to meet its obligations when they come due, without incurring unacceptable losses. Liquidity risk arises from the failure to recognize or address changes in market conditions affecting the ability of the bank to liquidate assets quickly and with minimum loss in value. Asset/liability and loan portfolio management systems should be appropriate for products offered through internet banking. Increased monitoring of liquidity and changes in deposits and loans may be warranted depending on the volume and nature of internet account activities.

PRICE RISK: Price risk is the risk to earnings or capital arising from
changes in the value of traded portfolio of financial instruments. The risk arises from market making, dealing and position taking in interest rate, foreign exchange, equity and commodities markets. Banks may have exposed to price risk if they create or expand deposit brokering, loan sales, or securitization programme as a result of Internet banking activities. Appropriate management systems should be maintained to monitor, measures, and manage price risk if assets are activity traded.

FOREIGN EXCHANGE RISK: Foreign Exchange risk is present

when a loan or portfolio of loans is dominated in a foreign currency or is funded by borrowings in another currency. In some cases, banks will enter into multi-currency credit commitments that permit borrowers to select the
39

currency they prefer to use in each rollover period. Foreign exchange risk can be intensified by political, social or economic development. Appropriate systems should be developed if bank engage in these activities.

REPUTATION RISK: Reputation risk is the current and prospective

impact on earnings and capital arising from negative public opinion. This affects the institution's ability to establish new relationships or services. This risk may expose institution to litigation, financial loss, or a decline in its customer base. A bank's reputation can suffer if it fails to deliver on marketing claims or to provide accurate, timely services. National Banks need to a sure that their business Continuity plans include the internet banking business. Regular testing or business continuity plan, communications strategies with the press and public, will help the bank ensure it can respond effectively and promptly to any adverse customer of media reactions.

TRANSACTION RISK: Transaction risk is the current and

prospective risk to earnings and capital arising from fraud, error, and the inability to deliver products or services, maintain a competitive position, and manage information. Transaction risk is evident in each product and service offered and encompasses product delivery, transaction processing, system development, computing systems, complexity of products and services, and the internal control environment. A high level of transaction risk may exist with Internet banking products, particularly if those lines of business are not adequately planned, implemented and monitored.

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COMPLIANCE RISK: Compliance risk is the risk to earning or capital

violations of, or nonconformance with, laws, rules, regulations, prescribed practices, or ethical standards. Compliance risk is also arises in situations where the laws or rules governing certain bank products or activities of the banks clients may be ambiguous or untested. Compliance risk exposes the institution to fines, civil money penalties, payment of damages, and the voiding of contracts.

STRATEGIC RISK: Strategic risk is the current and prospective impact

on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. The risk is a function of the compatibility of an organizations strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation. The resources needed to carry out business strategies are both tangible and intangible. They include communication channels, operating systems, delivery networks, and managerial capacities and capabilities. The organizations internal characteristics must be evaluated against the impact of economic, technological, competitive, regulatory, and other

environmental hangs.

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3.7

TYPES

OF

SECURITY

THREATS

IN

ONLINE

BANKING:
Banks and service providers require guarding against various types of online attacks. The purpose of an attack may vary. In operating systems of particular kind, attackers may try to exploit know vulnerabilities. During a short time frame, they also may try to make an unauthorized entry into a Web site repeatedly thus denying service to other customers. Types of attacks may include: Sniffers - Also familiar as network monitors, this software is used to capture keystrokes from a specific PC. Logon Ids and passwords may be captured with this software. Guessing Passwords - We can test all possible combinations to enter into a network using this software. Brute Force - A technique to capture encrypted messages then using software to break the code and gain access to messages, user ID's, and passwords. Random Dialing - To dial every number on a known bank telephone exchange, this technique is used. The purpose is to find a modem connected to the network. This could then be used as a point of attack. Social Engineering - To gain information about the system along with changing password, an attacker calls the bank's help desk impersonating an authorized user.
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Hijacking - Attempting to deduce information from them there by intercepting transmissions. Internet traffic is particularly susceptible to this threat. Fraudulent Bank Websites: A suspicious bank website: www.sbionline.com Original bank website: www.onlinesbi.com.

These website are believed to aim to trick persons into disclosing their sensitive personal information

Fake e-mails: Fake e-mails Email send from fraudulent bank Verify the personal information Guide customer enter the fraud link. Disclosing their ATM card numbers and their passwords

Viruses and Worms-Trojan Horse Program: Viruses and Worms-Trojan Horse Program When we open some suspicious websites or email Trojan Horse Program will install our computer secretly Hidden in the computer When you access bank websites Capture our account and the password.

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CHAPTER 4 DATA ANALYSIS & INTERPRETATION

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1) Use of internet banking

Yes 65%
70 60 50 40 30 20 10 0 users of E-banking yes 35% no 65%

No 35%

Interpretation: It is found that 65% of people use internet banking

2) Preference for online shopping

Yes 70% No 30%

80 70 60 50 40 30 20 10 0 yes no 30% yes no 70%

Interpretation: It is found that about 70% people give preference to

online shopping.
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3) No. of user of the banks

ICICI 20% SBI 30% SBH 20% AXIS 10% UNION 8% HDFC 12%

35 30 30 25 20 20 15 10 10 5 0 8 12 20

icici
sbi sbh axis union Hdfc

Interpretation:
It is found that about 30% people use SBI, 20% people use ICICI & Sbh bank, 12% people use Hdfc bank, 10 10% % people use Axis & 8% people use Union bank

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4) Do you use the following facility provided by the bank

Facility Phone banking Mobile banking Net banking Electronic fund transfer Atm Total Frequency 1 2 23 1 23 50 % 2% 4% 46% 2% 46% 100%

50 45 40 35 30 25 20 15 10 5 0 2 4

46

phone banking mobile banking net banking electronic fund transfer atm 2 facility 4

Interpretation:
From the above table it is found that majority of (46%) respondents are using the facility of net banking& ATM followed by (4%) are using mobile banking

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5) From where you heard about net banking for the 1st time
Source Friend Relatives Magazines Leaflets of the company Bank employee Internet Frequency 20 8 3 2 3 5 % 40% 16% 6% 4% 6% 10%

45 40 40 35 friend 30 25 20 15 10 10 5 0 6 6 4 16 bank employee relatives magazines leaflets of company internet

Interpretation:
From the above table it is found that majority of (40%) respondents are heard about net banking first time from friends followed by (16%) are heard from their relatives.

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6) How did you learn to use of net banking

Learn from Self From website of bank From staff of bank Friend total frequency 17 5 7 21 50 % 34% 10% 14% 42% 100%

45 40 35 30 25 20 15 34

42

self friend 14 10 from website of bank from staff of bank

10 5 0

Interpretation:
From the above table it is found that majority of (42%) respondents are learn to use net banking from their friends followed by (34%) are learn to use self (14%) are learn from bank staff and (10%) are learn from website of bank.

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7) Reason due to you started using net banking Reasons IT saves time IT is safe & secure I can use IT any where I dont have time to go to bank Total 50 100% Frequency 21 6 15 8 % 42% 12% 30% 16%

45 40 35

42

30 30 25 20 15 10 5 0 12

IT saves time IT is safe % secure I can use IT any where 16 I dont have time to go to bank

Interpretation:
From the above table it is found that majority of (42%) respondents are started to use net banking because it saves time followed by (30%) are started because it saves time (16%) are stared because respondents dont have time to go to the bank and (12%) are stared because it is safe & secure. sec

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8) Internet users in India by occupation

Senior executive: 22% Junior executive: 22% Student: 20% Self-employed: 10% Businessman/industrialist: 03% Small businessman/traders: 03% Housewife: 02% Other: 18%.

25

20 22% 15 22% 10 10% 5 3% 0 3% 2% 20% 18%

senior executives junior executives student self employed businessmen/industrialist small businessmes housewife other

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9) The time you are using internet

Age 18-25 26-35 36-45 46-60 60+ Less than a month 3 0 0 0 1 1-6 months 2 0 3 2 3 6-12 12 months 12 15 0 8 0

18 16 14 12 10 8 6 4 2 0 18-25 26-35 36-45 46-60 60+ 6-12 12 month 1-6 6 month less than a month

Interpretation: From the above interpretation we can say that all the yo u n g e r h a v e b e e n using internet since last one year but age group between 36-45, 46-60 60 and 61 61a and above have started using internet i n r e c e n t . F i n a l l y w e c a n t h e a g e group between 26-35 26 are the maximum users of the internet

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10) No. of people having internet

Age 18-25 26-35 36-45 46-60 60+ Own internet 27 51 20 8 1 Dont have internet 3 1 2 4 3

2 4 3

27

51

20 8 1

0 age 18-25 26-35 36-45 dont have internet 46-60 60+

own internet

Interpretation: From the above interpretation we can say that age group
between 18-25 27% % people have own internet wh i l e % wh o d o n t h a v e o wn i n t e r n e t i s 3% , s i mi l a r l y % between 26-35 51% people have own internet while 1% dont have own internet, 36-45 20% people have own internet while 2% dont have own internet, 46-60 8% people have own internet while 4% dont have own internet, 61and above 1 % people have own internet, 3%dont have own internet. . Finally we can see that age group 26-35 35 own maximum % of internet.
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CHAPTER 5 SUGGESTIONS & RECOMMENDATION

54

RECOMMENDATIONS & SUGGESTIONS

Advertising is not appropriate, as many people are not aware of internet banking Therefore Hoarding and Boards should be displayed at various prime locations in the city.

Timely payment of salary and Promotion of employees will boost their morale.

All the complaints of Customer should be deal in proper manner because it is the customer who will give good or bad mouth about bank services.

Non maintenance & other charges which are very high as compared to other Banks should be reduced.

Existing customer should always be informed about the new product. Regular connected with customer. Proper training of Bank staff to give impressive presentation.

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CHAPTER 6 CONCLUSION

56

CONCLUSION
Studying the project I came to know that Internet banking is clearly the way forward for the State Bank of India. It provides comfort to customers at the same time it provides cost cutting to SBI by eliminating physical documentation. Internet banking saves time of bank as well as those of customers. Study states that internet banking provides greater reach to customers. Feedback can be obtained easily as internet is virtual in nature. Customer loyalty can be gain. Personal attention can be given by bank to customer also quality service can be served. Bank should know that No system is perfect, however a system of such a type will need to be very secure. This is a system which holds account details and customers wealth. If such a system was not trusted and not reliable, then SBI would face serious laws and would lose business.

57

BIBLIOGRAPHY

Books: SBI Training guide for internet banking

Websites:-

www.statebankofindia.com www.onlinesbi.com www.weikipedia.com www.eHow.com www.Indiatimes.com

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Annexure
Questionnaire: (for customer) 1. Name of the customer: Age: profession: 2. Do you like E-banking Yes No

3. Tick which bank you prefer A. ICICI B. SBI C. SBH D. AXIS E. UNION BANK F. HDFC G.UTI BANK LTD H. BANK OF PUNJAB LTD

4. Why this bank a. Service is good b. They provide security c. Cheaper service fees.

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5. Which type of service mostly you use? a. Balance and transaction history search b. Transfer fund online c. Card to card fund transfer d. Open FD e. Lock / activate debit cards /ATM f. Request a cheque book g. Stop payment h. Railway pass / ticket i. Shopping j. Share payment

6. Services of the bank are. a. poor b. good c. Very good

7. Do you use the following facility provided by the bank a. Phone banking b. Mobile banking c. Net banking d. Electronic fund transfer e. Atm

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8. from where you heard about net banking for the 1st time a. Friend b. Relatives c. Magazine d. Leaflets of the company e. Bank employee f. Internet

9. How did you learn to use of net banking a. Self b. From website of bank c. From staff of bank d. Friend

10. Reason due to you started using net banking a. IT saves time b. IT is safe & secure c. I can use IT any where d. I dont have time to go to bank

11. The time you are using internet A) Le s s t h a n a mo n t h B) 1 to 6 months C) 6 to 12 months D) More than a year
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12. Are you satisfied with the using of E-banking? a. Yes b No 13. Are you aware of frauds from Internet banking? a. Yes b. No 14. Are you aware of the benefits of net banking which are available? (a) Yes (b) No

Suggestion:

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Questionnaire: (For bank manager) 1. Name: Age: Post:

2. Is everyone aware about net banking facility? Yes No

3. How many customers use internet banking?

4. What are the charges for internet banking? 5. How much amount can I transfer by using internet banking?

6. Do you educate your customers about internet banking service you provide?

7. What extra precautions you have taken for internet banking? 8. What are the benefits of SBI internet banking? 9. How can I apply for SBI internet banking? 10.Which type of fund transfers can be done on internet banking?

63