EPORT ON

IMPLEMENTATION OF TECHNOLOGICAL PRODUCTS IN SBI AND ITS IMPACT ON CUSTOMER SERVICES

In Partial fulfilment of the Master of Finance and Control Programme (2010-12)

SUBMITTED BY

SOUMYA TRIPATHY
MFC, Utkal University

Roll No: 10MFC012 Exam Roll No: 13706V101030 UNDER THE GUIDANCE OF
Mr. Ashok Kumar Mahakul
Chief Manager (BOPM-N.W-II) State Bank of India Local Head Office Bhubaneswar

Dr. Sabat Kumar Digal

Faculty, MFC Utkal University Bhubaneswar

MASTER OF FINANCE AND CONTROL (MFC)

P.G. DEPARTMENT OF COMMERCE UTKAL UNIVERSITY BHUBANESWAR

DECLARATION
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do

hereby

declare

that

the

project

entitled

Implementation of Technological Products In SBI and its impact on customer services is an authentic piece of work done by me under the guidance of Dr. Sabat Kumar Digal, Master of Finance and Control (MFC), Utkal University and Mr. Ashok Kumar Mahakul, CM, BOPM (N.W-II),

State Bank of India for the partial fulfilment of the requirement for the degree of Mater of Finance and Control (MFC), Utkal University, Bhubaneswar. This piece of research is my genuine work and has not been published anywhere at any time to the best of my knowledge.

Place: Bhubaneswar Date: (Soumya Tripathy)

ACKNOWLEDGEMENT

This project is not the culmination of hard work of just one person but is the result of a lot of help from a lot of people. The gratitude cannot be expressed in words, either written or oral but here I make an attempt to acknowledge those who have helped me in the successful completion of this project. At the outset, I would like to extend my sincere gratitude and reverence to the esteemed organization, STATE BANK OF INDIA and its management for providing me with the opportunity to pursue my summer project. I would like to thank Mr. Ashok Kumar Mahakul, CM, BOPM (N.W-II), State Bank of India who mentored me on the project and made sure that everything from the little details to the big picture was taken care of. I am also thankful to Mr. Srikar Panda, Chief Manager, Main Branch, Jharsuguda, State Bank of India, Mr. Shasanka Sekhar Sahu, Customer Relation Officer, Main Branch, State Bank of India, Sambalpur, for helping me in completion of this project. The staffs of State Bank of India, in all the branches of SBI where I had visited in Sambalpur and Jharsuguda were also extremely helpful to me while conducting the survey. I would like to mention my faculty guide Dr. Sabat Kumar Digal who helped and guided me in my project. I am thankful to Prof. Ranjan Ku. Bal for his support & knowledge which was instrumental in the success of the project. I am also thankful to my other faculty members, parents and my friends for their continuous support and encouragement. Last but not the least, my million thanks to all the CUSTOMERS who spared their valuable time in filling the questionnaire and with whom I have conversed with and taken inputs from them to complete the survey

Place: Bhubaneswar Date: (Soumya Tripathy)

EXECUTIVE SUMMARY
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The working of the customer's mind is a mystery which is difficult to solve and understanding the nuances of what customer satisfaction, is a challenging task. This exercise in the context of the banking industry will give us an insight into the parameters of customer satisfaction and their measurement. In the organised segment, banking system occupies an important place in nations economy. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. The commercial banks in India comprise of both Public sector as well as private sector banks. There are total 26 Public sector and 27 private sector banks are functioning in the country presently. Among the public sector banks the State Bank of India is the largest one. Banks have to deal with many customers every day and render various types of services to its customer. It's a well known fact that no business can exist without customers. Banking is a customer oriented services industry, therefore, the customer is the focus and customer service is the differentiating factors.

This project is on implementation of Technological Products in State Bank of India and its impact on customer services and customers satisfaction in tech products vis--vis other banks. A survey was conducted at the branches in Sambalpur and Jharsuguda to get feed back from the customers and bankers and their suggestions to improve customer services in SBI in terms of implementation of tech products. It contains the findings and analysis of the survey conducted to collect primary data through questionnaire responded by the customers regarding various parameters that influence customers satisfaction. These parameters are classified as Customer acceptance to technological products like Internet Banking, Mobile Banking and ATM Services and other tech Products, their feedback/suggestions/grievances. Further an attempt has also been made to know what features the bank should include to satisfy the customers and also to know the perception of customers regarding the technological services given by SBI. Further, the customers have ranked different Banks in terms of customer services. An attempt has also been made to categorize investors based on various factors such as sex, age, occupation, etc. The sample size is limited to 165, from which 106 are SBI customers and rest 59 are from different other public sector and private sector banks. This study specifies the reasons of customers satisfaction and dissatisfaction regarding the services given by their banks, specially relating to tech products. They suggested some valuable opinion that the bank needs to implement for better customer service. As the private banks and new generation banks have come up in a big way with prime emphasis on technical and customer focused issues, S.B.I, the premier Banking Institution in India faces challenge and needs to improve its services to retain its customer base.

CONTENTS
CHAPTER 1: INTRODUCTION TO THE STUDY 1.1 : INTRODUCTION TO THE STUDY..9 1.2 : REVIEW OF BANKING SERVICES ....11 1.3 : OBJECTIVE OF THE STUDY..12 1.4 : SCOPE OF THE STUDY...13 1.5 : RESEARCH METHODOLOGY.. 13 1.6 : LIMITATIONS OF THE STUDY..14

CHAPTER 2: COMPANY PROFILE 2.1 ORGANISATIONAL BACKGROUND..........................................................................16 2.2 INTERNATIONAL PRESENCE......................................................................................16 2.3 MISSION OF BANK.........................................................................................................17 2.4 VISION OF THE BANK...................................................................................................17 2.5 TRANSFORMATIONAL JOURNEY.............................................................................17 2.6 AWARDS AND RECOGNITION....................................................................................18 2.7 TRADITIONAL BANKING.............................................................................................18 2.8 LEDGERS TO COMPUTERS...........................................................................................19 2.9 COMPUTERS TO THE INTERNET................................................................................19 2.10 NEED FOR INTRODUCTION OF TECH PRODUCTS AND SERVICES IN SBI.....20

CHAPTER 3: INTERNET BANKING 3.1 HISTORY OF INTERNET BANKING........................................................................22 3.2 E-BANKING TRANSACTIONS..................................................................................23 3.3 DRIVERS OF CHANGE- LEADING TO INTERNET BANKING..............................23 3.4 TYPES OF INTERNET BANKING..............................................................................23 3.5 TRADITIONAL BANKING vs. INTERNET BANKING...........................................24 3.6 STRUCTURE OF INTERNET BANKING..................................................................24 3.7 BENEFITS OF INTERNET BANKING.......................................................................25 3.8 EMERGING CHALLENGES........................................................................................26 3.9 MAIN CONCERNS IN INTERNET BANKING.........................................................26 3.10 A SWOT ANALYSIS OF INTERNET BANKING...................................................27 3.11 INTERNET BANKING PROVIDED BY SBI...........................................................28

CHAPTER 4: MOBILE BANKING 4.1 INTRODUCTION.......................................................................................................32 4.2 MOBILE BANKING BUSINESS MODEL...............................................................32 4.3 MOBILE BANKING SERVICES..............................................................................33 4.4 CHALLENGES FOR A MOBILE BANKING SOLUTION.....................................34 4.5 MOBILE BANKING PROVIDED BY SBI...............................................................36

CHAPTER 5 : ATM SERVICES 5.1 INTRODUCTION.......................................................................................................39 5.2 HISTORY....................................................................................................................39 5.3 LOCATION.................................................................................................................40 5.4 GLOBAL USE............................................................................................................40 5.5 USES............................................................................................................................40 5.6 ATM SERVICE PROVIDED BY SBI.......................................................................41 CHAPTER 6: COMPARATIVE STUDY 6.1 PRACTICAL ACTIVITIES UNDERTAKEN............................................................45 6.2CUSTOMER SURVEY ANALYSIS...........................................................................45 6.3 COMPARATIVE ANALYSIS....................................................................................58 6.4 RECOMMENDATIONS.............................................................................................59 CHAPTER 7: SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION 7.1 BANKERS VIEW..........................................................................................................64 7.2 SUGGESTIONS AND CONCLUSION........................................................................65

ANNEXURE - I ANNEXURE - II

BIBLIOGRAPHY

LIST OF FIGURES AND TABLES

6.2.1.Number of Customers 6.2.2. Age profile 6.2.3. Customer of SBI , period of association(only SBI customers) 6.2.4. Awareness of the Technological services available at SBI(only SBI customers)

6.2.5. Customers availing the Technological services 6.2.6. Customers comfort level 6.2.7. Internet Banking and Mobile Banking , customers fulfilment of
basic requirement of banking services

6.2.8. Facilities that customer use from Internet Banking 6.2.9. Banks response to customers grievances (only INB users) 6.2.10. Facilities that customers use from Mobile banking 6.2.11. Customer satisfaction level regarding the services available in Technological products(only SBI) other banks

6.2.12.Customer using Internet Banking and Mobile Banking of 6.2.13. Customers availing the ATM facilities of the bank and
satisfied with the service

6.2.14. Facilities that customer use from ATM 6.2.15. SBI ATM , ambience rating vis--vis ATMs of other Banks
(only SBI customers)

6.2.16. Customers comfort level with security arrangement in SBI

ATMs against ATMs of other Banks.

6.2.17. Problems faced by the customers while transacting at the

ATM

6.2.18. Steps taken by the bank for sorting out problems in ATM
transactions

CHAPTER 1 INTRODUCTION

1.1 INTRODUCTION:
In the organised segment, banking system occupies an important place in nations economy. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. The commercial banks in India comprise of both Public sector as well as private sector banks. There are total 26 Public sector and 27 private sector banks are functioning in the country presently. Banks have to deal with many customers everyday and render various types of services to its customer. It's a well known fact that no business can exist without customers.

Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and service to service. The state of satisfaction depends on a number of both psychological and physical variables.

The banking industry like many other financial service industries is facing a rapidly changing market, new technologies, economic uncertainties, fierce competition and more demanding customers and the changing climate has presented an unprecedented set of challenges . Banking is a customer oriented services industry, therefore, the customer is the focus and customer service is the differentiating factors.

The banking industry in India has undergone sea change since post independence. More recently, liberalization, the opening up of the economy in the 90s and the government's decision to privatize banks by reduction in state ownership culminated in the banking reforms based on the recommendations of Narasimha Committee. The prime mover for banks today is profit, with clear indications from the government to 'perform or perish'. Banks have also started realizing that business depends on client service and the satisfaction

of the customer and this is compelling them to improve customer service and build up relationship with customers.

With the current change in the functional orientation of banks, the purpose of banking is redefined. The main driver of this change is changing customer needs and expectations. Customers in urban India no longer want to wait in long queues and spend hours in banking transactions. This change in customer attitude has gone hand in hand with the development of ATMs, phone and net banking along with availability of service right at the customer's doorstep. With the emergence of universal banking, banks aim to provide all banking product and service offering under one roof and their endeavour is to be customer centric. With the emergence of economic reforms in world in general and in India in particular, private banks have come up in a big way with prime emphasis on technical and customer focused issues.

1.1.1 Customers profile in Public Sector Bank :

When we talk about customer service, we tend to think it as a very simple issue of customer satisfaction. However its very complex issue because customers of Public sector banks comes from all walks of life; 1. From poorest to richest. 2. Youngest to oldest. 3. Illiterate to highly educated. 4. Sweeper to Chief Executive. 5. Individuals to Corporate. 6. People from all regions, religion, caste, age, service, profession etc. 7. People from different backgrounds, culture, temperament and ego levels. All customers from different backgrounds have different expectations. Unless the service standards fit to each persons expectations, he will not be satisfied. Therefore one has to understand each type of customer thoroughly to be able to provide customer specific services.

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1.1.2 Customer service- planning strategies:

The entire process of customer service is dependent on following. 1. The human resources. 2. The products itself. 3. Processes. 4. The delivery channels. 5. Customer feedback. 6. Grievances redressal mechanism 7. Market study While a number of the above processes can be copied by rival banks, it is only customer service that differentiates banks when it comes to choosing a bank by todays ever demanding customer.

1.2 REVIEW OF BANKING SERVICES:

Not so long ago, accessing our own money was about setting aside a couple of hours, getting to the bank before closing time, standing in one queue to get a token and then in another to collect the cash. Those were the pre-economic reforms days, when the banking sector primarily consisted of public sector banks. Cut to the present day and the nature of banking has changed beyond recognition. With ATM cards, simple banking transactions like withdrawing and depositing money are easier than ever before. For the tech-savvy, there is the option of banking online. The next medium is your mobile. Work done by Berry (Bart Allen) and Brodeur between 1990and 1998 defined ten 'Quality Values' which influence satisfaction behaviour, further expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviours, Commitment to the Customer and Innovation. These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model. Work done by Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the
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gap between the customer's expectation of performance and their perceived experience of performance. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. According to Garbrand, customer satisfaction equals perception of performance divided by expectation of performance. To compete successfully in todays competitive marketplace, banks must focus on understanding the needs, attitudes, satisfactions and behavioural patterns of the market (Kaynak and kckemirogl, 1992). Customers evaluate a number of criteria when choosing a bank. The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured.

1.3 OBJECTIVE OF THE STUDY:

The objective is to study the acceptance of various tech products viz. Internet banking, Mobile banking and ATM services amongst the customers of SBI and to have a comparative analysis of SBI on these products vis-a-vis other leading private and public sector banks. 1. To evaluate the quality of customer services given by SBI and other banks, and make a comparison between them. 2. To examine the quality of ATM facility and to detect whether there is any problem faced by the customers in using the ATMs. 3. To assess the quality of employees in the bank. 4. To detect whether customers are using advanced technology like Internet Banking and Mobile Banking or are they following the old traditional method. 5. To find out the exact weak areas in which SBI is lagging behind and to propose certain remedial measures to strengthen such weak areas in order to improve the quality of customer service.

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1.4 SCOPE OF THE STUDY:

The scope of the study is confined to comparing SBI with other Public sector and private sector banks in terms of customer satisfaction on technological products. The study will be undertaken on the basis of sample survey through structured questionnaire.

1.5 RESEARCH METHODOLOGY:

1.5.1 Sample and data collection This survey was conducted in the context of making a comparative study of customer services on technological products provided by SBI and other banks in the branches of Sambalpur and Jharsuguda. I approached more than three hundred customers in Sambalpur and Jharsuguda town, receiving responses from one hundred sixty five customers. Out of the 165 customers, 106 belonged to SBI whereas 59 are from other banks, both private sector and Nationalised banks. Some of the leading banks whose customers were approached for feedback are Union bank, Bank Of India, ICICI, HDFC, AXIS and some other banks. 1.5.2 Research Design The research design was descriptive and cross sectional 1.5.3 Data collection The data was collected from primary source through questionnaires and interviews. It is also collected from friends through mails. 1.5.4 Sample size The sample was selected on basis of convenience. The customers who were visiting the branches on some specific dates were approached by the scholar for their response to the questionnaire. A sample of 165 respondents is used in the research. From this sample 106 respondents are of SBI and rest 59 are from other Public and Private sector banks from Sambalpur and Jharsuguda town.

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1.5.5 Data sources Both Secondary and Primary sources of data are used. The major type of information used is primary data. This is done through primary survey. The review of banking services is a secondary data type. The sources include books, periodicals, websites, printed literature etc.

1.6 LIMITATIONS OF THE STUDY:

Busy Banking Hours: Many banks, because of busy banking hours could not extend much of the required help. Difficult to Interact: Talking to the customers over telephone from the bank during the working hour of the day restrained the scope to have easy interaction with them. Limited time: Each topic of this project demands more time for extensive study. So, if some more time would have been provided this project would have been much better.

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CHAPTER 2 COMPANY PROFILE

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STATE BANK OF INDIA

2.1 ORGANISATIONAL BACKGROUND:
State Bank of India is the largest state-owned banking and financial services company in India. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. With an asset base of $352 billion and $285 billion in deposits, it is a regional banking behemoth. It has a market share among Indian commercial banks of about 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation's loans. The State Bank of India is the 29th most reputed company in the world according to Forbes. Corporate office of the State Bank of India is in Mumbai. Mr. Pratip Chaudhuri is the present chair person of the State Bank of India. The Government of India is the largest shareholder in SBI.

2.2 INTERNATIONAL PRESENCE:

The bank had 151 overseas offices spread over 32 countries. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Capetown. SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius). It has two 2 subsidiaries in North America, State Bank of India(California), and State Bank of India (Canada). State Bank of India (California), which now has nine branches - eight branches in the state of California and one in Washington, D.C. The 9th branch was opened in Tustin, California on 7th March, 2011. The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in British Columbia.

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2.3 MISSION OF THE BANK:

The main aim of the bank was committed to excellence in customer, shareholder and employee satisfaction and to play a lenders role in expanding and diversifying banking to become the premiere Indian Financial Service Group.

2.4 VISION OF THE BANK:

The main vision of the bank was to retain its position in the country as a pioneer in development banking and to maximize shareholders value through high sustained earnings per share.

2.5 TRANSFORMATIONAL JOURNEY:

With more than 12,000 branches and a further 6500+ associate bank branches, the SBI has extensive coverage. State Bank of India has electronically networked all of its branches under Core Banking solution(CBS). There are more than 21,000 ATMs of SBI GROUP and out of which 16,300 ATMs are of SBI alone across India. In recent years, the bank has sought to expand its overseas operation by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. The State Bank of India, the countrys oldest Bank and a premier in terms o f balance sheet size, number of branches, market capitalization and profits is today going through a momentous phase of Change and Transformation the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money. The bank is entering into many new businesses with strategic tie ups Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc each one of these initiatives having a huge potential for growth. The Bank is forging ahead with cutting edge technology and innovative new banking models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years. It is also focusing at the top end of the market, on whole sale banking capabilities to provide Indias growing mid / large Corporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today, the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list.

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The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked, today it offers the largest banking network to the Indian customer. The Bank is also in the process of providing complete payment solution to its clientele with its over 21000 ATMs, and other electronic channels such as Internet banking, debit cards, mobile banking, etc. Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take all employees together on this exciting road to Transformation.

2.6 AWARDS AND RECOGNITION:

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

2.7 TRADITIONAL BANKING:

The banking procedures which were carried in a traditional way, manually by persons is termed as traditional banking. In this type of banking, there is very little use of technological methods. It has many drawbacks: Employees maintained Ledgers and registers which took much of their valuable time. This time could have been utilised for other profit oriented tasks like cross selling, deposit growth etc. Several errors and omissions in handling the ledgers and registers were resulting in much delay in reconciliation of accounts of the customer. Branches of the bank used to remain crowded at all times as for every small requirement the customer had to visit the bank. The customers were not able to have instant information of their accounts and had to come to the branch for small queries like balance enquiry. This consumed much time of both employees and customers.
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 There was a high possibility of fraud by manipulation of accounts and balance sheets. Manual work by employees had many demerits: This consumed a lot of time of both customer and employee. Application of interest in deposit accounts which were being done manually were in some cases wrong and excess interest charged in loan accounts were creating dissatisfaction among the customers For account statement or updating of passbooks etc, customers could not be attended properly and promptly to their satisfaction. Delay in complying with their requests was leading to customers satisfaction.

Thus to avoid such problems in branches and to provide better services to the customers, the bank underwent a technological transformation.

2.8 LEDGERS TO COMPUTERS:

The tiring and time taking lengthy banking procedures of maintain records needed to be ultimately changed for the benefit of the bank as well as its customers. Thus, was sensed the requirement of a substitute of man that could do the work more efficiently and easily. There was an improvement in the previous system. State Bank of India switched over to computers for the same. All the banking records were maintained by the computers through software by mere efforts of the employees thereby drastically reducing the pressure.

2.9 COMPUTERS TO THE INTERNET:

A great leap towards the modernisation of the bank was taken by enforcing Business Process Re-engineering(BPR) procedure which proved to be a great success. A customer is not merely a customer of the branch rather is a customer of the bank as a whole. SBI went through BPR and introduced the CORE BANKING system enabled by the Intranet facility in its branches. By this, all the relevant information of the customers account and the transaction could be made available from any branch of the bank irrespective of the location. The extensive use of the Internet gave way for even better services by the bank to its customers. SBI introduced the alternate channel of banking otherwise known as Alternate Banking for its customers. This service included the Internet Banking, ATM services, and Mobile Banking. The bank also started providing important value added services to the customers. The leading amongst them are Demat services and Online trading and Money Transfer Services under the Western Union banner.
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2.10 NEED FOR INTRODUCTION OF TECH PRODUCTS AND SERVICES IN SBI:

Private sector banks made their first appearance in January 1993. During that period, PSBs accounted for over three- fourths of total banking industry assets. They were weighed down with huge NPAs(Non- Performing Assets), falling revenue, lack of modern technology and a massive and highly unionized workforce. New entrants began to erode the market share of the Nationalised banks, especially in metro cities and urban areas. The PSBs found it increasingly difficult to compete with the new private sector banks and the foreign banks. These banks also employed state-of-the-art technology, which helped them to save on manpower costs and concentrate on providing better service. THE RESTRUCTURING To overcome the intense competition from private and foreign banks, SBI planned a major organizational restructuring exercise. The key aspects involved redesigning of branches, providing alternate channels; focus on a lean structure and technological upgradation. A business process reengineering (BPR) team was constituted in June 2003 with McKinsey & Company as consultants. The BPR's basic goal was to create an operating architecture that would facilitate service delivery of international standards. The project objectives were defined as "increasing customer satisfaction and convenience, freeing up time for branch manager and branch staff to focus on sales and marketing, simplifying process for employees, enhancing SBI's competitiveness in the market, increasing the profitability through higher market share and improved process efficiency". Hence newer schemes and methods were adopted so as to ease the banking procedure and attract customers. BPR project is designing business process to leverage the core banking platform to improve the banks performance in key business areas and also quality of service. The main objective of BPR in SBI are explained as follows: Retain the existing customers: New, alternate channels like Internet Banking and Mobile Banking were introduced in order to avoid the switching over of existing customers to other banks for new technological facilities. Enlarge its customer base: To increase its customer base SBI introduced various technological products like Internet Banking, Mobile Banking, ATM services, Demat services, Money transfer etc. Cope with competition: competition as regards to value for time and better services was one of the major areas to be taken care of. Value added services to the customers: SBI offered different Value Added Services to its customers in order to give them a new experience of performing their basic scheduled works from the comfort of their home/office through the banks internet banking site.
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CHAPTER 3 INTERNET BANKING

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INTERNET BANKING
Internet Banking refers to a system that enables bank customers to access accounts and general information on bank products and services through a PC(Personal Computer) or any other intelligent device. Internet banking is used widely by masses, and has numerous benefits to offer. Nowadays, all banks provide online banking facility to their customers as an added advantage. Gone are the days, when one had to transact with a bank which was only in his local limits. Online banking has opened the doors for all customers, to operate beyond boundaries. Nowadays, people are so busy in their work lives, that they dont even have time to go to the bank for conducting their banking transactions. Internet banking enables people to carry out most of their banking transactions using a safe website, which is operated by their respective banks. It provides many features and functions to their customers, and enables them to view their account balance, transfer money from their account to another account, view their account summary, etc. There are two ways to offer Internet banking: First, an existing bank with physical offices can establish a web site and offer Internet banking in addition to its traditional delivery channels. Second, a bank may be established as a branch less, Internet only, or virtual bank without any physical branch.

3.1 HISTORY OF INTERNET BANKING:

The concept of Internet banking has been simultaneously evolving with the development of the world wide web. Programmers working on banking data bases came up with ideas for online banking transactions, some time during the 1980's. The creative process 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 these databases 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.

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3.2 E-banking transactions:

The following are some the basic functions of Internet banking: Account enquiry Fund transfer Payment of electricity, water and telephone bills Online payment for transactions actually performed through internet Request for issuance of cheque book, demand draft etc Statement of accounts Access to latest schemes Access to rates of interest and other service charges

3.3 DRIVERS OF CHANGE- LEADING TO INTERNET BANKING:

Advantages previously held by large financial institutions have shrunk considerably. The internet has levelled the playing field and afforded open access to customers in the global market place. Internet banking is a cost-effective delivery channel for banks and financial institutions. Consumers are embracing the many benefits of internet banking. Access to ones accounts at anytime and from any location via the World Wide Web is a convenience unknown a short time ago. Thus, banks internet presence transforms from brouchreware status to internet banking status once the bank goes through a technology integration effort to enable the customers to access information about his or her specific account relationship. The primary drivers of Internet banking includes: Improve customer access and attract new customers Facilitate the offering of more services Increase customer loyalty Provide services offered by competitors Reduce customer attrition Cost efficiency Geographical reach Relationship branding

3.4 TYPES OF INTERNET BANKING:

Broadly, the levels of banking services offered through INTERNET can be categorised in three types: Informational Internet Banking

This fundamental level of banking does not allow patrons to view or maintain accounts, nor does it allow for communication between the financial institution and customers. Informational Internet banking simply means the bank provides basic information about its products and services, much like a brochure. This is meant for marketing purposes only, and there is no connection to the bank's main computer systems.
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 Communicative Online Banking Communicative online banking allows for some communication between the patron and bank. However, this is typically limited to fundamental interactions such as account inquiries, new account updates, loan or mortgage applications, contact information updates and balances. Communicative online banking may connect with the bank's main computer systems. Transactional Internet Banking The most popular online banking type, transactional Internet banking offers all of the benefits of a traditional brick-and-mortar institution. This includes full control over your accounts---deposits, withdrawals, transfers, updates and online payments. Increased security measures now make Internet banking safe, secure and convenient, especially in the case of mobile online banking.

3.5 TRADITIONAL BANKING vs. INTERNET BANKING:

In traditional banking, the customer has to visit the branch of the bank in person to perform the basic banking operations viz., account enquiry, funds transfer, cash withdrawing etc., On the other hand, E-banking enables the customers to perform the basic banking transactions by sitting at their homes or at offices through a desktop or laptop round the clock globally through electronic media. This is called anytime, anywhere banking. The customers can access the banks website for viewing their account details and perform the transactions as per their requirement. Customers can make use these services with no restricted banking hours, no queues, no tellers and no waiting.

3.6 STRUCTURE OF INTERNET BANKING:

In general, Internet banking products are offered in a two-tired structure A basic tier of Internet banking products includes customer account inquiry, funds transfer and electronic payment. A second or premium tier includes basic services plus one or more additional services such as 1. Brokerage payment 2. Cash management 3. Credit applications 4. Credit and debit cards 5. Customer correspondence 6. Demat holdings 7. Financial advice 8. Foreign exchange trading 9. Insurance
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10. Online trading 11. Opening accounts 12. Request and intimations 13. Tax services 14. E-shopping 15. Standing instructions 16. Investments 17. Asset management services etc.

3.7 BENEFITS OF INTERNET BANKING:

(i) Round the clock banking E-banking facilitate performing basic banking transactions by customers round the clock globally. In fact there are no restricted office hours for E-banking. (ii) Convenient banking Customer can perform basic banking transactions by simply sitting at their office or at home through PC or Laptop. No personal visit to the bank is required for routine basic transactions. (iii) Low cost banking The operational cost have come down due to technology adoption. The cost of transactions through internet banking is much less than any other traditional mode. (iv) Profitable banking The increased speed of response to customers requirement can enhance customer satisfaction and consequently can lead to higher profits as a result of handling more number of customer accounts. (v) Quality banking Internet banking allows the possibility of improved quality and an enlarged range of services being made available to customers (vi) Speed banking The increased no of response to customers requirements will lead to greater customer satisfaction and handling a large number of transactions at a lesser time. Thus, it increases the customers convenience to a greater extent and facilitates better customer retention.

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(vii) Service banking Banks can also offer many cash management products. Instant credit, one day credit, immediate payment of utility bills, instant transfer of funds etc., is possible under E-banking.

3.8 EMERGING CHALLENGES:

A large sophisticated and highly competitive Internet Banking Market has developed which is basically driven by following factors: Demand side pressure due to increasing access to low cost electronic services. Emergence of open standards for banking functionality. Growing customer awareness and need of transparency. Global players in the fray Close integration of bank services with web based E-commerce or even disintermediation of services through direct electronic payments (E- Cash). More convenient international transactions due to the fact that the Internet along with general deregulation trends, eliminate geographic boundaries. Move from one stop shopping to 'Banking Portfolio' i.e. unbundled product purchases.

3.9 MAIN CONCERNS IN INTERNET BANKING:

In a survey conducted by the Online Banking Association, member institutions rated security as the most important issue of online banking. There is a dual requirement to protect customers' privacy and protect against fraud. Banking Securely: Online Banking via the World Wide Web provides an overview of Internet commerce and how one company handles secure banking for its financial institution clients and their customers. Some basic information on the transmission of confidential data is presented in Security and Encryption on the Web. Online also offers a primer: How Encryption Works. A multi-layered security architecture comprising firewalls, filtering routers, encryption and digital certification ensures that your account information is protected from unauthorised access: Firewalls and filtering routers ensure that only the legitimate Internet users are allowed to access the system. Encryption techniques used by the bank (including the sophisticated public key encryption) would ensure that privacy of data flowing between the browser and the Infinity system is protected. Digital certification procedures provide the assurance that the data you receive is from the Infinity system.

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3.10 A SWOT ANALYSIS OF INTERNET BANKING:

Strengths:

Customer access to information 24 hours per day. Timely access to information. The ability to offer a customer more than one method of retrieving information. Sophisticated technology systems will help to make a banking institute "futureproof." Diversity helps capture different types of markets. The ability to cut internal costs due to advanced technology. Increased efficiency due to automation. Increased accuracy of banking transactions. Weaknesses:

High price of service. Continual altering of customer wants and needs. Hostile feelings of employees due to possible pending lay-offs due to automation. Multiple options for the customer. Initial investment in technology will be expensive. Opportunities:

The ability to obtain a larger customer base. Global expansion. This is an enormous market which will be a great opportunity in the future. The ability to take advantage of the growing popularity of Internet banking. Threats:

Continual changing technology. Uncertainty of the banking industry. Competition from "lower price" operations. Possible failure of product due to non-acceptance of customer. General competitiveness of the banking industry

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3.11 INTERNET BANKING PROVIDED BY SBI:

SBI has always been a trendsetter among banks in introducing new technology. SBI started INB facility on pilot basis in 2000, which was finally rolled out in 2004. OnlineSBI is the internet portal for SBI. For customers its website is www.onlinesbi.com that means any customer having internet facility can view his account and can transact at any time if the customer has availed the internet banking facility from SBI branch. The customer need not visit the branch and can do the banking transactions from the residence, office, shop or even in journey on laptop through internet.

3.11.1 OnlineSBI:
State Bank of India is India's largest bank with a network of over 13000 branches and 5 associate banks located even in the remotest parts of India. State Bank of India (SBI) offers a wide range of banking products and services to corporate and retail customers. OnlineSBI is the Internet banking portal for State Bank of India. The portal provides anywhere, anytime, online access to accounts for State Bank's Retail and Corporate customers. The application is developed using the latest cutting edge technology and tools. The infrastructure supports unified, secure access to banking services for accounts in over 13,000 branches across India. 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 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 Pay bill of Visa Credit Card issued by any Bank.

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.
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Use online transactional features such as fund transfer to own accounts, third party payments (both Inter and Intra bank), 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

In addition to the above the Internet banking application also provides the following 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: 1. Core Banking Transactions 2. Inter Bank Transactions for incoming RTGS/NEFT Transactions 3. Internet Banking Transactions for SBI & Associate Banks 4. Direct Debit facility where suppliers can directly debit their customers account through Internet Banking

3.11.2 SECURITY PROVISIONS OF SBI INTERNET BANKING WEBSITE:

SBI provides 3 types of passwords under the security features to its customers to ensure safety of the customers accounts and transactions: Login password Profile Password High security Password SBI provides the Online Virtual Keyboard facility to its customers as to protect them and their money from key loggers those who can steal/hack passwords from keystrokes. The position of characters on the online virtual keyboard keeps on changing for each log-in. So, there is very less chance of password hacking. Online SBI is certified by Verisign, the worlds leading internet certification authority. On the site, transmission of messages and data communicated by customers are encrypted. This site has another provision of session timed out i.e. after a time gap, the session automatically gets blocked until another login. In SBI, Internet Banking offers a host of online facilities to its individual customers as mentioned below: Account statement-view or print Railway ticket booking through e-rail SBI E-Tax (tax payments) Bill payment (e-pay)
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 Fund Transfer and Third Party transfer (Intra bank as well as interbank transaction using RTGS/NEFT, SBGRPT) Request for Demand Draft/ Bankers Cheque Cheque book issue request Standing instructions TDR account opening/ Renewal SMS alert Mutual funds payments SBI express remit- for NRI customers Foreign travel card Operate his linked and demat account Besides for retail customers, a separate Internet Banking module for corporate customers has been introduced and is available at all big branches. For corporate customers, 4 separate modules are available: Advantage (Khata)- Most suited for small firms, companies, institutions banking with one branch of SBI. Advantage plus (KhataPlus)- Most suited for firms, companies, institutions banking with multiple branches of SBI. Privilege (Vyapaar)- For small and medium sized organizations, small user group with discretionary access and discretionary rights. Freedom (Vistaar)- For large and very large organizations. Access to accounts across branches with a single sign on.

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CHAPTER 4 MOBILE BANKING

31

MOBILE BANKING
4.1 INTRODUCTION:
Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customised information." According to this model Mobile Banking can be said to consist of three inter-related concepts:

Mobile Accounting Mobile Brokerage Mobile Financial Information Services

Most services in the categories designated Accounting and Brokerage are transaction-based. The non-transaction-based services of an informational nature are however essential for conducting transactions - for instance, balance inquiries might be needed before committing a money remittance. The accounting and brokerage services are therefore offered invariably in combination with information services. Information services, on the other hand, may be offered as an independent module. The advent of the Internet has enabled new ways to conduct banking business, resulting in the creation of new institutions, such as online banks, online brokers and wealth managers. Such institutions still account for a tiny percentage of the industry. Over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world and it is still growing at a rapid pace. Many believe that mobile users have just started to fully utilize the data capabilities in their mobile phones. In Asian countries like India, China, Bangladesh, Indonesia and Philippines, where mobile infrastructure is comparatively better than the fixed-line infrastructure, and in European countries, where mobile phone penetration is very high (at least 80% of consumers use a mobile phone), mobile banking is likely to appeal even more.

4.2 MOBILE BANKING BUSINESS MODEL:

A wide spectrum of Mobile/branchless banking models is evolving. However, no matter what business model, if mobile banking is being used to attract low-income populations in often rural locations, the business model will depend on banking agents, i.e., retail or postal outlets that process financial transactions on behalf telcos or banks. The banking agent is an important part of the mobile banking business model since customer care, service quality, and cash management will depend on them. Many telcos will work through their local airtime resellers.
32

These models differ primarily on the question that who will establish the relationship (account opening, deposit taking, lending etc.) to the end customer, the Bank or the NonBank/Telecommunication Company (Telco). Another difference lies in the nature of agency agreement between bank and the Non-Bank. Models of branchless banking can be classified into three broad categories - Bank Focused, Bank-Led and Nonbank-Led. 4.2.1 Bank-focused model The bank-focused model emerges when a traditional bank uses non-traditional low-cost delivery channels to provide banking services to its existing customers. Examples range from use of automatic teller machines (ATMs) to internet banking or mobile phone banking to provide certain limited banking services to banks customers. This model is additive in nature and may be seen as a modest extension of conventional branch-based banking. 4.2.2 Bank-led model The bank-led model offers a distinct alternative to conventional branch-based banking in that customer conducts financial transactions at a whole range of retail agents (or through mobile phone) instead of at bank branches or through bank employees. This model promises the potential to substantially increase the financial services outreach by using a different delivery channel (retailers/ mobile phones), a different trade partner (telco / chain store) having experience and target market distinct from traditional banks, and may be significantly cheaper than the bank-based alternatives. The bank-led model may be implemented by either using correspondent arrangements or by creating a JV between Bank and Telco/non-bank. In this model customer account relationship rests with the bank. 4.2.3 Non-bank-led model The non-bank-led model is where a bank has a limited role in the day-to-day account management. Typically its role in this model is limited to safe-keeping of funds. Account management functions are conducted by a non-bank (e.g. telco) who has direct contact with individual customers.

4.3 Mobile Banking Services:

Mobile banking can offer services such as the following: 4.3.1 Account Information 1. 2. 3. 4. 5. 6. 7. 8. Mini-statements and checking of account history Alerts on account activity or passing of set thresholds Monitoring of term deposits Access to loan statements Access to card statements Mutual funds / equity statements Insurance policy management Pension plan management
33

9. Status on cheque, stop payment on cheque 10. Ordering cheque books 11. Balance checking in the account 12. Recent transactions 13. Due date of payment (functionality for stop, change and deleting of payments) 14. PIN provision, Change of PIN and reminder over the Internet 15. Blocking of (lost, stolen) cards 4.3.2 Payments, Deposits, Withdrawals, and Transfers 1. 2. 3. 4. 5. 6. 7. 8. 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

4.3.3 Investments
1. Portfolio management services 2. Real-time stock quotes 3. Personalized alerts and notifications on security prices

4.3.4 Support
1. 2. 3. 4. Status of requests for credit, including mortgage approval, and insurance coverage Check (cheque) book and card requests Exchange of data messages and email, including complaint submission and tracking ATM Location

4.3.5 Content Services

1. General information such as weather updates, news 2. Loyalty-related offers 3. Location-based services

4.4 CHALLENGES FOR A MOBILE BANKING SOLUTION:

Key challenges in developing a sophisticated mobile banking application are : 4.4.1 Handset operability There are a large number of different mobile phone devices and it is a big challenge for banks to offer mobile banking solution on any type of device. Some of these devices support Java ME and others support SIM Application Toolkit, a WAP browser, or only SMS.
34

Initial interoperability issues however have been localized, with countries like India using portals like R-World to enable the limitations of low end java based phones, while focus on areas such as South Africa have defaulted to the USSD as a basis of communication achievable with any phone. 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. 4.4.2 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: 1. 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. 2. 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. 3. Authentication of the device with service provider before initiating a transaction. 4. User ID / Password authentication of banks customer. 5. Encryption of the data being transmitted over the air. 6. Encryption of the data that will be stored in device for later / off-line analysis by the customer. 4.4.3 Scalability & Reliability Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile banking infrastructure to handle exponential growth of the customer base. With mobile banking, the customer may be sitting in any part of the world (true anytime, anywhere banking) and hence banks need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers will find mobile 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. 4.4.4 Application distribution Due to the nature of the connectivity between bank and its customers, it would be impractical to expect customers to regularly visit banks or connect to a web site for regular upgrade of their mobile banking application. It will be expected that the mobile application itself check the upgrades and updates and download necessary patches (so called "Over The
35

Air" updates). However, there could be many issues to implement this approach such as upgrade / synchronization of other dependent components. 4.4.5 Personalization It would be expected from the mobile application to support personalization such as : 1. 2. 3. 4. 5. 6. Preferred Language Date / Time format Amount format Default transactions Standard Beneficiary list Alerts

4.5 MOBILE BANKING PROVIDED BY SBI:

SBI has launched mobile banking services under the brand name of SBI-FreedoM. Through this you can carry out almost all transaction as you did on the Internet Banking. Here is how to get SBI Mobile banking on your mobile and instructions for Registration and Activation. SBI Mobile Banking-Features Presently in initial phase the mobile banking service SBI-FreedoM have the following features

Balance enquiries and mini statements. Fund transfer to SBI and other banks. Demat account related queries. Utility bills, merchandise and SBI Life insurance premium payments. Request for check book issue.

Registration and Activation of SBI Mobile Banking You need to download the Mobile Banking Application to your mobile, which must be java enabled for proper functioning of the application. You can download the application in following two ways

Method 1:Download the mobile banking application from here ,transfer the application to your mobile and install. Method 2:If you have a GPRS connection, then you can Send an SMS <MBSREG> <MobileMake> <MobileModel> to 567676.For example if you have a Nokia N70 mobile then send MBSREG Nokia N70 to 567676.On the reply you get a WAP link to download the application as well as user id and MPIN.

Using SBI FreedoM Mobile Banking

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Once the application is installed, run it and click Register link in case you have installed using method 1 shown above(also shown in figure).Soon you should get an SMS which contains a user id and MPIN (Mobile PIN).Login to the application using the given user id and MPIN and change the MPIN immediately. Now after first login the system needs to be activated. This activation can be down by either your branch manager or by you at any SBI ATM. In order to activate it using SBI ATM, select services on the ATM menu and press Register for mobile Banking . The service should be activated within 24 hours, after which you will be able to use the mobile banking service. Charges on SBI Freedom Mobile Banking The usage of SBI mobile banking is FREE from SBI however you will be charged for any SMS the application sends as decided by your mobile carrier. This mobile banking service is one more way to avoid those long queues at the SBI branches so download and enjoy the service. You can see the mobile banking page on SBI site here and from the same page you can download a simple User Guide in pdf format which explains all the basic information about the use of mobile banking. State Bank of India recently launched a service called SBI Freedom. With SBI Freedom, customers can use facilities like balance inquiry, mini statement, fund transfer, cheque book issuance, mobile recharge and bill payment at any time and place through the use of their cellphones. SBI will soon be adding rail and air ticket booking and shopping to this service. A customer is registered when he or she sends an SMS to 567676 prefixed with the area code. The service is activated either after the password is verified at an ATM or by the bank branch when the customer appears in person. This makes the system foolproof. People living in remote areas and students would benefit the most from this service. With SBI Freedom, your bills can be paid or money sent to the loved ones or balance inquiries done anytime 247. SBI Freedom offers convenience, simple, secure, anytime and anywhere banking. The limit for daily fund transfers and bill payments is Rs 5,000 and Rs 10,000 respectively. Currently the facility will be available only on Java-enabled mobile phones with GPRS connections. Customers can get the software for the service installed at any of the banks branches for free through Bluetooth technology. The service is presently available on java enabled mobile phones over SMS/ GPRS/ WAP as also non java phones with GPRS connection. The service can be availed over the free GPRS facilities offered by various mobile service providers. The services for other non-Java mobile phones is offered using Unstructured Supplementary Services Data (USSD).
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CHAPTER 5 ATM SERVICES

38

ATM SERVICE
5.1 INTRODUCTION:
An automated teller machine (ATM), also known as a Cash Point, Cash Machine or sometimes a Hole in the Wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. ATMs are known by various other names including automatic banking machine, cash machine, and various regional variants derived from trademarks on ATM systems held by particular banks. Invented by IBM, the first ATM was introduced in December 1972 at Lloyds Bank in the UK. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN). Using an ATM, customers can access their bank accounts in order to make cash withdrawals, credit card cash advances, and check their account balances as well as purchase prepaid cell phone credit. If the currency being withdrawn from the ATM is different from that which the bank account is denominated in (e.g.: Withdrawing Japanese Yen from a bank account containing US Dollars), the money will be converted at a wholesale exchange rate. Thus, ATMs often provide the best possible exchange rate for foreign travellers and are heavily used for this purpose as well

5.2 HISTORY:
The idea of self-service in retail banking developed through independent and simultaneous efforts in Japan, Sweden, the United States and the United Kingdom. In the USA, Luther George Simjian has been credited with developing and building the first cash dispenser machine. There is strong evidence to suggest that Simjian worked on this device before 1959 while his 132nd patent (US3079603) was first filed on 30 June 1960 (and granted 26 February 1963). The rollout of this machine, called Bankograph, was delayed a couple of years. This was due in part to Simjian's Reflectone Electronics Inc. being acquired by Universal Match Corporation. An experimental Bankograph was installed in New York City in 1961 by the City Bank of New York, but removed after 6 months due to the lack of customer acceptance. The Bankograph was an automated envelope deposit machine (accepting coins, cash and cheques) and it did not have cash dispensing features. ATMs first came into use in December 1972 in the UK; the IBM 2984 was designed at the request of Lloyds Bank. The 2984 CIT (Cash Issuing Terminal) was the first true Cashpoint, similar in function to today's machines; Cashpoint is still a registered trademark of Lloyds TSB in the UK. All were online and issued a variable amount which was immediately deducted from the account.

39

5.3 LOCATION:
ATMs are placed not only near or inside the premises of banks, but also in locations such as shopping centres/malls, airports, grocery stores, petrol/gas stations, restaurants, or anywhere frequented by large numbers of people. There are two types of ATM installations: on- and off-premise. On-premise ATMs are typically more advanced, multi-function machines that complement a bank branch's capabilities, and are thus more expensive. Offpremise machines are deployed by financial institutions and Independent Sales Organizations (ISOs) where there is a simple need for cash, so they are generally cheaper mono-function devices.

5.4 GLOBAL USE:

There are no hard international or government-compiled numbers totaling the complete number of ATMs in use worldwide. Estimates developed by ATMIA place the number of ATMs in use currently at over 1.8 million. For the purpose of analyzing ATM usage around the world, financial institutions generally divide the world into seven regions, due to the penetration rates, usage statistics, and features deployed. Four regions (USA, Canada, Europe, and Japan) have high numbers of ATMs per million people. and generally slowing growth rates. Despite the large number of ATMs, there is additional demand for machines in the Asia/Pacific area as well as in Latin America. ATMs have yet to reach high numbers in the Near East/Africa. The world's most northerly installed ATM is located at Longyearbyen, Svalbard, Norway. The world's most southerly installed ATM is located at McMurdo Station, Antarctica. While India claims to have the world's highest installed ATM at Nathu La Pass, India installed by the Union Bank of India at 4310 meters, there are higher ATMs installed in Nagchu County, Tibet at 4500 meters by Agricultural Bank of China. Israel has the world's lowest installed ATM at Ein Bokek at the Dead Sea, installed independently by a grocery store at 421 meters below (Mediterranean) Sea level. While ATMs are ubiquitous on modern cruise ships, ATMs can also be found on some US Navy ships

5.5 USES:
Although ATMs were originally developed as just cash dispensers, they have evolved to include many other bank-related functions. In some countries, especially those which benefit from a fully integrated cross-bank ATM network (e.g.: Multibanco in Portugal), ATMs include many functions which are not directly related to the management of one's own bank account, such as:
40

Deposit currency recognition, acceptance, and recycling Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.) Printing bank statements Updating passbooks Loading monetary value into stored value cards Purchasing o Postage stamps. o Lottery tickets o Train tickets o Concert tickets o Movie tickets o Shopping mall gift certificates. Games and promotional features[63] Fastloans CRM at the ATM Donating to charities Cheque Processing Module Adding pre-paid cell phone / mobile phone credit. Paying (in full or partially) the credit balance on a card linked to a specific current account. Transferring money between linked accounts (such as transferring between checking and savings accounts)

5.6 ATM SERVICE PROVIDED BY SBI:

State Bank offers you the convenience of over 21,000 ATMs in India, the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks - namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore) and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cumDebit (Cash Plus) card.

5.6.1 KINDS OF CARDS ACCEPTED AT STATE BANK ATMs:

Besides State Bank ATM-Cum-Debit Card and State Bank International ATM-Cum-Debit Cards following cards are also accepted at State Bank ATMs: 1) State Bank Credit Card 2) Cards issued by other banks displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos 3) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos
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5.6.2 State Bank ATM-cum-Debit (State Bank Cash plus) Card:

India's largest bank is proud to offer you unparalleled convenience viz. State Bank ATMcum-Debit (Cash Plus) card. With this card, there is no need to carry cash in your wallet. You can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit Card. Get an ATM-cum-Debit card with which you can transact for FREE at any of over 21,000 ATMs of State Bank Group within our country

5.6.3 STATE BANK CASHPLUS SCHEME:

5.6.3.1 Features:

Withdraw cash from over 21,000 ATMs of our group FREE and about 40000 ATMs of other banks under multi-lateral sharing viz. Andhra Bank, Axis Bank, Bank of India, The Bank of Rajasthan Ltd. Canara Bank, Corporation Bank, Dena Bank, HDFC Bank, ICICI Bank, Indian Bank, IndusInd Bank, Punjab National Bank, UCO Bank and Union Bank of India apart from ATMs displaying Master Card/ Maestro/Cirrus logo for FREE upto first 5 transactions in a calendar month (for SB account holders). Make payments for purchases by using the debit card at more than 4 lakh shops, restaurants, shopping malls, hotels, petrol pumps and many other outlets which display Maestro logo. Recharge pre-paid mobile phones of Vodafone, IDEA, Reliance and BPL without any charges at any State Bank ATM. Recharge pre-paid mobile phones of AIRTEL of 11 Circles viz. Mumbai, Delhi, Gujarat, M.P., U.P. (East), U.P. (West), Karnataka, Kerala, Andhra Pradesh, Tamilnadu, and Chennai, through ATM/ SMS anywhere in India.

5.6.3.2 Transaction Limits:

Daily limit of Rs 40,000/- at the ATM Daily limit of Rs 50,000/- at Point of Sale (POS) terminal for debit transactions Combined daily limit of Rs 90,000/The breakup of Multi Option Deposit Scheme units is available through the Saving Bank / Current Account linked with the ATM-Cum-Debit Card, if attached with the MODS. The withdrawals can be made in units of Rs 1000/from the Deposits.

5.6.3.3 Fees:
There is no joining fee for State Bank ATM-cum-Debit (Cash Plus) card. Annual maintenance fee of Rs. 50/- p.a. will be recovered from the second year of issue.
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5.6.4 State Bank Cash Plus International Card:

This is an International ATM-cum-Debit Card with which you can enjoy shopping at over 4 lakhs establishments in India and over 10.5 Million establishments worldwide displaying Maestro logo, wherein the amount you spend on your card is automatically debited to your account. Withdraw cash from over 21,000 ATMs of our group FREE of other banks from ATMs displaying Master Card/ Maestro / Cirrus logo in India and more than 8,20,000 ATMs across the globe for a nominal fee. In India, it would function as the State Bank ATM-cumDebit (Cash Plus) card.

5.6.4.1 WITHDRAWAL LIMIT:

i) Cash Withdrawals(per day) :
India Minimum Rs. 100 Maximum Rs. 40000 Abroad Depends on the Bank whose ATM is being used US$1000 or equivalent

ii) Transaction at POS (per day) :

Maximum India Rs. 1,00,000 Abroad US$1000 or equivalent

Maximum permitted aggregate utilization in a day is Rs. 145000 in India and equivalent to US$ 2000 abroad(subject to compliance with the RBI and Exchange Control/ FEMA Regulations)

5.6.4.2 TRANSACTION COSTS:

Transaction cost is free.

5.6.4.5 Benefits:
Convenience to the customers travelling overseas Can be used as Domestic ATM-cum-Debit Card Available at a nominal joining fee of Rs. 200/Daily limit of US $ 1000 or equivalent at the ATM and US $ 1000 or equivalent at Point of Sale (POS) terminal for debit transaction Purchase Protection*up to Rs. 5000/- and Personal Accident cover*up to Rs. 2,00,000/-

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Chapter 6 Comparative study

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6.1 PRACTICAL ACTIVITIES UNDERTAKEN:

The project is concerned with finding out the acceptance of Technological Products of SBI within the customers of SBI. Internet Banking, Mobile Banking and ATM services are the leading Tech products provided by SBI. Hence, to find out the satisfaction and complaints of the customers regarding Tech Products, I conducted a customer survey through structured questionnaire and had telephonic interaction with them. I was denied the credentials of the customers to be taken out of the bank, so all the customer interaction was carried out at the branches of the bank itself. Then according to the customer response the findings were interpreted. I visited many branches of SBI in Sambalpur and Jharsuguda and collected the relevant information from the concerned bank officials regarding the progress and complaints of Technological products. I also took their opinion of the improvements that can be undertaken in this sector. I collected the statistical data concerning the transactions and comparative details in the Technological products of SBI. Finally conclusions were drawn and improvements were recommended.

6.2CUSTOMER SURVEY ANALYSIS:

6.2.1. Number of Customers : State Bank of India 106 ICICI 13 HDFC 15 AXIS Bank Union Bank Bank of India 10 10 11

120 100 80 60 40 20 0

106
SBI ICICI HDFC AXIS

13

15

10

10

11

Union Bank of India

Customer of which bank Explanation:

A large number of SBI customers are surveyed in comparison to other banks. Out of the 165 customers surveyed, SBI itself covers 106 customers and the rest are from other banks.

45

6.2.2. Age profile of customers using Tech-products: 21-25 47 26-30 51 31-35 23 36-above 44

Age group
47
51 23 44
Age group

21-25 Explanation:

26-30

31-35

36-40

From the above chart we found that 51 respondents belong to 26-30 age group, 47 customers from 21-25 age group, 44 from 36-40 age group and the remaining 23 belongs to 31-35 group. This shows that technological products are more preferred by average age people ranging from 26-30.

6.2.3. Customer of SBI, period of association(only SBI customers): Upto 1 year 12 1year or more 39 More than 3 year 55

Series 1
60 50 40 30 20 10 0

55 39 12
Series 1

Upto 1 yr

1yr or more

More than 3 yr

Explanation:
From the survey it is found that most of the customers i.e 55 have their account in SBI for more than 3 years.
46

6.2.4. Awareness of the Technological services available at SBI (only SBI customers): Yes 101 No 5

120 100 80 60 40 20 0

101

yes no

5 Awareness of Tech services in SBI

Explanation:
The chart shows that of the total 106 customers surveyed in SBI, from them 101 are aware of technological products provided by SBI. This shows that SBI is taking major steps to make customers aware by advertising in television, by sending SMS or through directly approaching the customers in the bank. This also shows the popularity and acceptability of SBIs tech products.

6.2.5. Customers availing the Technological services: Internet Banking (INB) 94 Mobile Banking (MBS) 55 Others 16

Tech services availed

94
100 80 60 40 20 0

55 16
INB MBS Others
Tech services availed

47

Explanation:
The survey shows that 94 people have availed Internet banking, 55 have availed Mobile Banking and the rest 16 use other tech facilities. This shows that most of the customers use INB facility of the bank and very less use MBS of bank because of lack of awareness regarding MBS.

6.2.6. Customers comfort level: Traditional Banking 37 Internet Banking 87 Mobile Banking 25 All of the above 16

87
100 80

25
60

16
All of the above MBS INB

Traditional Banking INB MBS All of the above

37
40 20 0 Category 1

Traditional Banking

Explanation:
From the survey, it has been observed that 87 customers are comfortable in using the Internet banking, 25 are comfortable with MBS, 16 are satisfied with all services but 37 are still satisfied with traditional form of banking. It is observed that around 22% customers still believe in traditional banking.

6.2.7. Internet Banking and Mobile Banking , fulfilling the basic requirement of banking services: Yes 140 No 25

48

160

140
140 120 100 80 60 40 20 0 yes no

25

INB and MBS fulfil the basic banking services Explanation:

Around 140 customers believe that INB and MBS provide the basic services that a customer requires. The remaining 25 people still believe that INB and MBS is not much effective. By analyzing the feedback, It shows lack of awareness amongst the customers and failure on part of the Bank to market its products.

6.2.8. Facilities that customer use from Internet Banking: Balance enquiry Third party transfer Railway ticket booking Bill payment Income tax payment Life premium payment Applying of shares through IPO Request for cheque book 92 85 87 64 38 35 35 75

49

100 90 80 70 60 50 40 30 20 10 0

92 85 87 75 Balance Enquiry 64 3rd party transfer Railway ticket booking Bill payment 38 35 35 Income Tax payment Life premium payment Applying of shares through IPO Request for cheque book

users of facilities from INB Explanation:

From the various facilities available in INB, large number of customers nearly 80% mostly use balance enquiry, 3rd party transfer, railway ticket booking facility. A very least number of customers around 35-40 avail and are aware of the other facilities being provided by bank in INB like income tax payment, life insurance payment and applying of shares through IPO.

6.2.9. Banks response to customers grievances (only INB users): Yes 55 No 39

60 50 40 30 20 10 0

55

39
yes no

Sorting out problems by the branch instantly

50

Explanation:
Around 55 customers said that bank help them in sorting out their problems which arise while using INB facilities. The remaining 39 are dissatisfied in case any problem arise they dont get enough support from the bank to sort out their problems. Effective steps should be taken by the bank to sort out the problems of customers.

6.2.10. Facilities that customers use from Mobile banking: Balance enquiry Mini statement Fund transfer Request for cheque book Mobile top-up/recharge Mobile to mobile money transfer through Inter Money Payment and Service(IMPS) system 50 45 35 31 14 1

60

50
50 40

45 35 31

Balance enquiry Mini statement Fund transfer Request for cheque book

30

20

14

mobile Top-Up/Recharge Mobile to Mobile money transfer throughIMPS system

10

1
0

Users of Mobile Banking facilties Explanation:

From the MBS provided by bank the customers mostly use the balance enquiry facility and getting mini statement . Transfer of funds to own account and to third party account is yet to be popularised. The mobile to mobile money transfer through IMPS system is newly introduced by SBI and customers are not much aware of it. This shows that a very least number of customers use the MBS facility.
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6.2.11. Customer satisfaction level for the following services of the bank in Technological products(only SBI): Highly Satisfactory 35 37 18 9 13 14 25 17 20 Satisfactory Cannot Dissatisfactory Highly say Dissatisfactory 61 10 55 47 38 34 29 66 56 64 30 44 46 54 14 11 15 13 9 15 21 12 10

Safety and security Time saver Avoidance of money laundering Transparency regarding Hidden charges Adequacy of value added service Instant availability of multiple account information Transaction speed Accessibility and convenience Speed of resolution of any problem related to banking procedure
70 60 50 40 30 20 10 10 0 0 0 35 61

12

66 55 47 37 30 14 0 0 18 11 0 9 0 15 44 38 46 34 29 13 13 0 14 9 0 0 0 25 15 17 21 12 0 54 56

64

20 12 10 0

Highly satisfactory Satisfactory Cannot say Dissatisfactory

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Explanation:
The findings of the survey regarding the satisfaction level of the customers for different attributes of technological services are as follows: Around 35 customers are highly satisfied that technological products is safe and secured form of banking whereas 61 are just satisfied and 10 still feel that it is not safe. Around 37 customer believe that tech products saves a lot of time and they are highly satisfied and 55 are just satisfied and 14 are dissatisfied. A wide percentage of the customer base i.e. 47 is satisfied with the security from money laundering and fraud and 18 are highly satisfied. 11 of them are dissatisfied and 30 are still a bit reluctant. This is because many of the customers still have more faith upon the traditional banking and consider it more secured. This is because they have direct interaction with bankers and self-vigilance of their accounts. Only 9 customers are highly satisfied with the transparency of charges for usage of services and 47 of them are somewhat satisfied. 15 of them are dissatisfied. 44 customers are not even aware about various kinds of services available. From the survey conducted it has been observed that though the charge for each service has been mentioned in the site itself, many customers are not aware of them and they complain unnecessarily charging them highly. Around 34 customers are satisfied with the adequacy of the value added services. Again 46 are not even aware of these services. They deal only in balance enquiry, transactions etc. 54 customers are not aware of the multiple account information, 29 are satisfied with the availability of multiple account information though some of them complain about delay and site congestion. Around 25 customers are highly satisfied with the speed of transactions and 66 are somewhat satisfied. The customers have few complaints like slow site, server down and hence they are not fully satisfied. Around 56 of the customers are satisfied with the accessibility and convenience whereas 17 are highly satisfied, 21 are dissatisfied. Around 64 Customers are satisfied with the speed of resolution of problem. 12 are dissatisfied and 10 are highly dissatisfied with this service. They complain of delay in providing services.

53

6.2.12.Customer using Internet Banking and Mobile Banking of other banks: IDBI Oriental Bank of Commerce Punjab National Bank UCO ING Vyasa
10
10 8 6 4 2 0

10 5 10 5 10
10 10
IDBI

oriental Bank of Commerce Punjab National bank UCO ING Vyasa

customer using INB and MBS of other Bank Explanation:

Syndicate

From the survey, it is found that customers of SBI , though less in numbers ,also use the INB and MBS service of other banks like IDBI, Oriental bank of commerce, PNB, UCO, ING Vysya, Syndicate bank .

6.2.13. Customers availing the ATM facilities of the bank and satisfied with the service: Yes 149
200 150 100 50 0

No 16
149
yes

16

no

Availing the ATM facility and satisfied with the service Explanation:
Around 149 customers avail the ATM facility of the bank and they are satisfied with the service provided. The rest 16 dont avail the ATM facility they still like to withdraw from the bank this may arise due to lack of faith in ATM service.
54

6.2.14. Facilities that customer use from ATM: Withdrawing cash Sending a request for cheque book Transferring the money to other ATM card holders Making payment of SBI Life Insurance Making payment of SBI card 149 44 74 12 15

160 140

149 Withdrawing cash

120 100 80 60 40 20 0 Sending request for cheque book money transfer to other ATM card holders Payment of SBI Life Insurance

74 44 12 15

Payment of SBI card

Users of ATM facilities Explanation:

Around 149 customers still use the ATM for withdrawing cash only. 74 use it for transferring money to other ATM card holders, 44 of them use it for sending request for cheque book but a very few of them avail the facility like payment of SBI life insurance and payment of SBI card.

6.2.15. SBI ATM , ambience rating vis--vis ATMs of other Banks (only SBI customers): Better 48 Average 50 Low standard 8

55

Ambience of SBI ATM in comparison to other ATM's

48
50 40 30 20 10 0 Better Average

50

Ambience of SBI ATM in comparison to other ATM's

Low standard

Explanation:
From the survey, 50 customers rate the ambience of SBI ATM in comparison to other ATMs as average, 48 of them rate it as better and 8 of them rate the standard as very low.

6.2.16.: Customers comfort level with security arrangement in SBI ATMs against ATMs of other Banks: Yes 90
100 80 60 40 20 0 yes

No 16
90

16

no

Guard system at SBI ATM like other ATM

Explanation:
Around 90 customers said that there is a need of guard system in SBI ATM like other ATMs to ensure safety and discipline and remaining 16 of them said that no guard system is required.

6.2.17. Problems faced by the customers while transacting at the ATM: Faulty machines Non-availability and shortage of cash Long queue Ac not working 84 106 78 71

56

120 100 80 60 40 20 0 84

106 78 71

Faulty machines Shortage of cash Long queue AC not working

Problems faced at ATMs Explanation:

From the survey, 106 customers said that they face the problem of shortage of cash, 84 of them said about faulty machines, 78 of them said about long queue, 71 of them complain about AC not working.

6.2.18. Steps taken by the bank for sorting out problems in ATM transactions: Very good 50
95
100

Good 95

Average 20

Steps taken by the bank for sorting out problems

50
50

50

Steps taken by the bank for sorting out problems

0 Very good Good Average

Explanation:
Around 95 customers said that steps taken by bank for sorting out problems in ATM transactions is good and 50 of them are fully satisfied with the services and 50 of them rate it as average.

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6.3 COMPARATIVE ANALYSIS : SERVICES PROVIDED BY DIFFERENT BANKS THROUGH INTERNET BANKING
BANKS State Bank of India ICICI Bank AXIS Bank HDFC Bank PNB

SERVICES E-ticketing E-tax Bill payment Online trading RTGS-NEFT E-payment Fund transfer Third party transfer Demand draft Cheque book request Account opening request Account statement Transaction enquiry Demat account statement Smart money order Prepaid mobile recharge Online shopping Credit card statements Donation

Available Available Available Available Available Available Available Available Available Available Available

Available Available Available Available Available Available Available Available Available Available Available

Not available Available Available Available Available Available Available Available Available Available Not available

Available Available Available Available Available Available Available Available Available Available Not available

Available Available Available Available Available Available Available Available Not available Not available Not available

Available Available Available

Available Available Available

Available Available Available

Available Available Available

Available Available Available

Not available Not available Available Available Available

Available Available

Not available Available

Not available Available

Not available Not available

Available Available Available

Available Available Available

Available Available Available

Available Available Available

From the comparative analysis it is observed that SBI provides almost all the basic services that can help a customer to avail 24 hours banking services sitting at home. Few areas such as Smart Money Order, Prepaid Mobile Recharge are the few areas on which SBI should start working upon. SBI should start thinking deeply of providing even more services to lead
58

the market. The differentiating factors in attracting customers are to provide better services and to instil sense of securities amongst the customers , promptly responding to customers grievances.

6.4 RECOMMENDATIONS:
SBI ,with the aim of providing advanced technology based services to the customers has introduced internet Banking and other Value Added Services. Now the Bank has adequate infrastructure like Core Banking Services( CBS) platform and technically qualified human resources that has helped to extend customer base. From the Research study conducted, it has been found there are some of the basic problems. Some suggestions as per the findings of the study are listed below: INB facility is provided to the customers who voluntarily request for it. But the facility can be provided as a rule to all the customers. More importance should be given to the marketing of these technological products. Conducting of workshops and customer awareness programmes should be given importance. Proper training of the staff members including the day-today changes should be done frequently. The INB website should be more user friendly. Links of all the services should be listed in the Home page in a segregated manner so that customer doesnt have to search for them. Effective use and benefits of Value Added Services should be clearly explained to the customers. The bank must also provide them with handouts explaining the usage of various Value Added Services under SBI INB. An option, addressing to the problems of the customer as and when they arise, should be added so that their issues are resolved immediately. These issues must be regularly looked so that the customer doesnt have to wait for long. There should be proper display of boards advertising INB in special counters in the branches, so that the customer can be made aware of the services and served with perfection. Some customers are not satisfied with the speed of the site. Though the speed of connectively depends upon the service provider, the banks web server should be well equipped in order to accommodate maximum requests generated at a time.

59

6.5 COMPARATIVE ANALYSIS: SERVICES PROVIDED BY DIFFERENT BANKS THROUGH MOBILE BANKING
BANKS SERVICES Service charge WAP Fund transfer Enquiry services Cheque book request Demat services Bill payment Other services Nil Nil Nil Rs.150 annually STATE BANK OF INDIA ICICI Bank HDFC Bank AXIS Bank

Credit card and loan enquiry Last transaction detail Stop cheque request Fixed deposit detail Account statement Transaction limit USSD Fund transfer Enquiry services Cheque book request Stop cheque request Credit cards Demat services (Holding and bill enquiry) SMS BANKING Balance enquiry Cheque book request Loan and credit card enquiry Demat enquiry

Available Available Available Available Available M commerce (Mobile top up, Tata sky top up, Recharge of other DTH, Merchant payment, SBI life insurance payment) Not available Available Not available Not available Available Daily: Rs 50,000 Monthly: Rs. 2,50,000 Available Available Not available Not available Not available Not available

Not available Available Available Available Not available Not available

Available Available Available Not available Not available Not available

Available Available Available Not available Not available Daily: Rs. 50,000 Not available Available Available Available Available Available

Not available Available Available Available Available Data not available

Available Available Available Available

Available Available Not available Not available

Available Not available Not available Available (security balance) Not available Available Available

Stop cheque request Cheque status Last transaction

Available Not available Available

Available Available Available

60

From the comparative analysis it is observed that SBI provides almost all the basic services (apart from SMS Banking, but the services being covered in other forms) that can help a customer bank from the comfort of home. SBI provides more services than other banks like HDFC Bank and AXIS Bank though ICICI Bank has got the potential to attract customers since it provides most of the services. ICICI bank, apart from all these services has its separate immobile venture under which it provides various additional services which makes it unique. Few areas such as SMS Banking, Cheque request and status, Loan and Credit Card Enquiry are the few areas on which SBI should start working upon. SBI should start thinking deeply of providing even more services to better lead the market.

6.6 RECOMMENDATIONS:
The interaction with the customers as well as the bankers in the market has provided the information that mobile banking as a tech venture is not yet so popular among masses. In comparison, traditional banking is preferred. A large block of customers still use mobile phones for very limited purposes. Thus the following suggestions are provided: Mobile Banking facility is provided to the customers who voluntarily request for it. But the facility can be provided as a rule to all the customers. The bank should provide mobile banking service to the existing customers as well as to the new customers while opening the accounts. Conducting of workshops and customer awareness programmes should be given importance. Proper training of the staff members including the day-to-day changes should be done frequently. There should be a separate counter for tech products in the branches of the banks addressing the needs of customers requiring assistance. A step-by-step demonstration of how to use Mobile Banking should be made available, with the customers having knowledge of it. The bank must also provide them with handouts explaining the usage of various Value Added Services under SBI Mobile Banking. An option, addressing to the problems of the customer as and when they arise, should be added so that their issues are resolved immediately. These issues must be regularly looked so that the customer doesnt have to wait for long. The bank provides the high end mobile set having java enabled and Bluetooth facility. But should try to provide this service to the low end set as most of the customers of SBI are of low income group and rural based. Bank has developed of late USSD model to suit to low end mobile set but in practice has not been implemented. It should have coverage to customers.
61

6.7 COMPARATIVE ANALYSIS: SERVICES PROVIDED BY DIFFERENT BANKS THROUGH ATM SERVICES

BANKS SERVICES Cash withdrawl Life insurance payment SBI card payment Cheque book request Money transfer to other ATM card holders Guard system Cash deposit

STATE BANK OF INDIA Available Available Available Available Available

ICICI Bank Available Available Available Available

HDFC Bank Available Available Available Available

UNION BANK Available Available Available Available

Not available Not available

Available Available

Available Available

Available Not available

From the comparative analysis it is observed that SBI provides almost all the basic ATM services that can help a customer. More services are provided at SBI ATM in comparison to other banks ATMs. But most importantly guard system should be introduced inorder to ensure proper safety and security. SBI should start thinking deeply of providing even more services to better lead the market.

6.8 RECOMMENDATIONS:
The interaction with the customers as well as bankers has provided information that ATM fulfil almost all the basic services that a customers requires but still there are few problems. Some suggestions as per the findings of the study are listed below: Quick services should be provided at the ATM so that wastage of time can be minimized. Number of ATMs should be increased so that long queue can be avoided. Guard system should be introduced at SBI ATM in order to ensure proper maintenance and security. Availability of money should be properly taken care of. Periodical supervision regarding the working condition is necessary. ATM should be equipped with cash deposit facilities which is found lacking in most of the ATM counters.
62

CHAPTER 7 SUMMARY OF FINDINGS, SUGGESTION AND CONCLUSION

63

7.1 THE BANKERS VIEW:

The project is concerned with finding out the acceptance of Technical Products of SBI amongst the customers of SBI as well as to see the level where SBI stands in comparison to other leading private banks. Internet banking, Mobile banking and ATM services are leading tech products provided by SBI. Hence, I conducted a survey through structured questionnaire and had personal interaction with each of the banks. Then according to their response the findings were interpreted. I visited Main Branch of SBI in Jharsuguda, Station Square branch(jharsuguda), Evening Branch(Jharsuguda), Main Branch(Sambalpur), ADB Branch(Sambalpur), CB branch(Sambalpur), Evening Branch(Sambalpur), Budharaja Branch(Sambalpur), Bank of India(Jharsuguda), ICICI Bank(Jharsuguda, Sambalpur), AXIS Bank(Jharsuguda, Sambalpur), Union Bank of India(Sambalpur) and collected relevant information from the concerned bank officials regarding the progress and complaints of technological products. I also took their opinion of the improvements that can be undertaken in this sector. I collected the data concerning the ways of providing services and the basic problems that they face. Finally conclusions were drawn and improvements were recommended. The Bankers view on different tech products can be summed up as under:

7.1.1 Internet Banking:

After having a comparative analysis of all the banks it has been observed that: 1.) There has been a commendable growth in the subscription of Internet Banking for last few years. The increase ranging from 40% to 60% for different banks. 2.) All of the banks have a special counter that provides basic information regarding technological products. 3.) Internet banking is included specifically for all banks in marketing of products and services. 4.) The basic complaints received are: Delay in conducting transaction sometimes Fund transfer taking time 72 hours for first users. The customer dont have a clear idea on the products and services and the charges associated with them. Hence they complain about charging them excessively.

64

7.1.2 Mobile Banking:

After having a comparative analysis of all the banks it has been observed that: There has been a marked growth in the subscription of Mobile Banking for the last few years for most of the private banks. The average increase being 50%. But SBI lags behind in the implementation of mobile banking to a certain extent, the primary reason being the customer mix of the bank. Mobile banking is included specifically for all the banks in the marketing of products and services. The basic complaints received are: a) The customers dont have a clear cut idea on the products and services and the charges associated with them. Hence they complaint about charging them excessively. b) Resetting and synchronisation of new passwords. C) The problem relating to downloading of software in their mobile handsets and sometimes delay in completing the transactions.

7.1.3 ATM Services:

After having a comparative analysis of all the banks it has been observed that: There has been remarkable increase in the number of ATM users. The average increase being 70%. The basic complaints received are: a) Account debited but cash not dispensed and account debited twice for same withdrawals. b) Security guard at SBI ATM must be there.

7.2 SUGGESTIONS AND CONCLUSION:

The name of State Bank of India has been written in golden letters in the pages of history as a successful organization in the banking sector. Over the years it has evolved with innovative services which have earned its name and fame. It has a large customer base. With improved technology SBI has come up with technology products like ATM Services, INTERNET BANKING, MOBILE BANKING , GREEN CHANNEL COUNTERS . Except ATM services , other tech products have a little coverage of its total customer base mainly due to low reach to its customers, low awareness by its staff members, low broadband penetration in India and lack of effective marketing of the products. The bank should take care of this situation so that the benefits and the value added services available under its technology products will not only help to retain its EXISTING
65

CUSTOMER BASE but will bring MORE CUSTOMER BASE to its fold. It can prove as the STRONGEST BANK provided its Technology Products are fully experienced by its customers. There are some areas where SBI gives fair competition to other banks, but there are many services where SBI lags far behind. Though SBI has been increasing its stand every year when compared to previous years performance but it is not enough to beat the ever increasing competition from other private players in the market. For the successful implementation and progress of the various Tech products initiated by SBI, I feel that the bank should concentrate on the following areas: There should be wide publicity of these products and services at the bank branches as well as at important market places for awareness of the customers. Conducting of workshops for the customers who dont know how to use the Internet services or how to use GPRS in mobile should be done. This is one of the most important improvements required because the customer mix of SBI is a varied one. It includes people from every income group and level of society, which is not so in other private banks. The customers should be made aware of safe online banking practices. Proper training of all the staff members including the features of the products and day-to-day changes should be done frequently. Special counters with prominent boards may be opened at the branches to provide tech services specifically, so that more customers can be brought under the purview of alternate channels. Till date the counters in the bank provides services like cash receipt/ payment, draft issues/payment, TDR issues/payment etc. The internet banking website should be made more user-friendly. Links of all the services should be listed in the Home page in a segregated manner so that customer doesnt have to search for them. The employees including the marketing officials specifically should be provided with the Tech products compulsorily so that they can know the uses better and in turn educate, convince and mobilize the customers.

66

 The branches of the bank should make the customer aware of the tech products and their features in a crystal clear way. Effective use and benefits of Value Added Services should be clearly explained to the customers. The bank can also provide them with handouts explaining the usage of various Value Added Services. Free demonstration of these services should be done so that the customers sees and understands the ease of procedure involved in actually conducting transactions. An option, addressing to the problems of the customer as and when they arise, should be added so that their issues are resolved immediately. These issues must be regularly looked so that the customer doesnt have to wait for long. Special teams can be employed for effective marketing of the products at various offices, merchant establishment etc for wide coverage of the schemes. Guard system should be introduced at SBI ATM in order to ensure safety and security. Cyber crime is a major challenge for successful implementation of tech-products, which is to be dealt with strongly to instil sense of security among the customers. Advertisements should be done to make customers aware about Green Channel Banking.

The premier aim of SBI today is to provide its customers with a pleasant and unprecedented experience of using technology based products and ensure the comfort and safety of the customers and their money. With this objective, the bank can maintain its position, can retain its name and fame and can continuously grow in all the business parameters in the financial market domestically and globally. This is one of the aim with which SBI must march ahead taking all its customers together.

67

ANNEXURE-I

A BANKERS SURVEY ON TECHNOLOGICAL PRODUCTS

1. Do you provide the following Tech Products services? i) Internet Banking(INB): Yes / No ii) Mobile Banking(MBS): Yes / No iii) ATM : Yes / No iv) Any other(please specify): Yes / No 2. Do you provide these services to the customers : On request Part of Account Opening Facility Others (please mention) 3. What is the annual average addition of users under the following services for last 3 (three) years: 2008 2009 2010 INB MBS 4. Number of average transactions per day across ATM the Counter for the last three(3) years: Year No. of transactions 2008 2009 2010 5. Do you recover service charges fee for providing Tech Products services? Yes No 6. Do you have a special counter in your branch for providing information about various features of technological products to the customers? Yes No 7. Do you have exclusive marketing strategy outside the Branch at various offices, merchant establishments etc for promoting products like INB and MBS to large number of users? Yes No If yes at what intervals: Regular basis Occasionally
68

8. As per RBI guidelines, mobile banking services need to be promoted to cover all the customers of the Bank. Is it acceptable and introduced at your Bank? Yes No 9. What are the basic complaints that you receive from your customers on account of Tech services (INB, MBS, and ATM)? INB: .......................................................................... ATM: ..................................................................................................................... MBS: ...................................................................................................................... 10. Do you feel that Tech services if improved will reduce the crowd at the counter? Yes No 11. Mention the major challenges that you face in the implementation of Tech services (INB, MBS, ATM)? INB:........................................................................................................................ ............................................................................................................................... MBS:....................................................................................................................... ............................................................................................................................... ATM:....................................................................................................................... ............................................................................................................................... 12. Suggest steps taken by the bank to improve the performance and penetration of Tech services? ............................................................................................................................... ............................................................................................................................... ...............................................................................................................................

NAME OF THE BANK/BRANCH: OFFICIALS NAME: CONTACT NO.:

Thank you for sparing some of your valuable time and being a part of the research study

69

ANNEXURE-II
CUSTOMER FEEDBACK ON TECHNOLOGICAL SERVICES 1. Are you a customer of SBI? Yes No If yes, for how long? i) Upto 1 year ii) 1 year or more

iii) More than 3 year

2. Are you aware of the Technological products services available at SBI: Yes No 3.Which Technological services you have availed: i) Internet Banking (INB): Yes No ii) Mobile Banking (MBS): Yes No iii) Any Other (Please Specify) ......................................................................................... 4. Which service you frequently use: INB MBS Both 5. Are you more comfortable with? Traditional Banking at branch Internet Banking at any place Mobile Banking Services All of the above 6. Do you feel, Internet Banking and Mobile Banking fulfil the basic Banking services that a customer requires? Yes No If yes, what facilities you use from Internet Banking: a) Balance enquiry: Yes No b) Third party transfer: Yes No c) Railway ticket booking: Yes No d) Bill payment: Yes No e) Income Tax payment: Yes No f) SBI Life Premium payment: Yes No g) Applying for shares through IPO: Yes No h) Request for cheque book: Yes No 7. In case of any problems relating to INB transactions, do you get help from the branch instantly to sort out the problems? Yes No
70

8. Do the branch staff educate you regarding the various facilities available under INB? Yes No 9. Do you use the following facilities of Mobile Banking? i) Balance enquiry: Yes /No ii) Mini statement: Yes /No iii) Fund transfer: Yes /No iv) Request for Cheque Book: Yes /No v) Mobile Top-up/ Recharge: Yes /No vi) Mobile to mobile money transfer through Inter Money Payment and Service (IMPS)system: Yes /No 10. In case of any problem on account of Mobile Banking transactions, are you advised where to contact for getting problems sorted out? Yes No If yes, please mention where you get the remedial services: ............................................................................................................................... ............................................................................................................................... 11. Do you feel transactions through Mobile Banking are secure and safe? Yes No 12. Please put tick marks against the satisfaction level that you consider is appropriate for the following services of your Bank in Tech products
Satisfactory level Safety and security Time saver Avoidance of money laundering Transparency regarding Hidden charges Adequacy of value added service Instant availability of multiple account information Transaction speed Accessibility and convenience Speed of resolution of any problem related to banking procedure Highly Satisfactory Satisfactory Cannot say Dissatisfactory Highly Dissatisfactory

71

13.Do you use Internet Banking and Mobile Banking services of any other Banks? Yes No a) If Yes, please mention: ........................................................................................................................ ........................................................................................................................ b) How do you rate SBI INB/MBS vis-a-vis other Bank: i) At par ii) Good iii) Better iv) worse 14.Do you avail the ATM facility of the Bank? Yes No If Yes, are you satisfied with the services? Yes /No If No, what are the reasons: i)Not aware of the product ii)Like traditional banking iii)Not reliable iv)Not customer friendly v) Do not feel secure and safe vi)Any other reasons 15. Do you use ATM for following transactions? i) For withdrawing cash only: ii) For making payment of SBI life Insurance: iii) For making payment of SBI card: iv) For sending a request for a cheque book: v) For transferring the money to other ATM card holders:

Yes Yes Yes Yes Yes

/No / No / No / No / No

16.Do you have idea that all the above facilities are available under SBI ATM: Yes No 17. Do you feel safe to make your transactions at SBI ATM? Very comfortable comfortable Uneasy and feel risky 18. How do you rate the ambience in SBI ATM in comparison to other ATMs? Better Average Low standard 19. Do you suggest to have a guard system at SBI ATM like other ATMs to ensure discipline and safety to the customers: Yes No 20. Do you face any problem while transacting at the ATM such as: i) Faulty machines Yes No ii)Non availability and shortage of cash Yes No iii)Long queue Yes No iv) AC not working Yes No v) Any Other(please specify) Yes No
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21. How do you feel regarding steps taken by SBI for sorting out problems in ATM transactions? Very good Good Average 22. Do you avail the ATM services of more than one Bank? Yes /No if yes, rank the Bank as per their ATM services: ............................................................................................................................... ............................................................................................................................... ............................................................................................................................... 23. Are you aware about the Green Channel Banking? Yes No If Yes, what problems do you face in it? ............................................................................................................................... ............................................................................................................................... 24. Any complaints regarding the Technological Services provided by Bank? Yes No 25. In case of problems relating to your ATM transactions do you get: Automatic redressal/solutions from the bank Need to approach the bank consent 26. Please suggest ways to improve the Tech Product Services (INB,MBS,ATM) of your Bank? INB:.................................................................................................................. MBS:................................................................................................................ ATM:...............................................................................................................

PERSONAL DETAILS: 1. Name: 2. Age: 3. Branch: 4. Account Number (optional):

Thank you for sparing some of your valuable time and being a part of the research study

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BIBLIOGRAPHY
1. Customer satisfaction key growth to Banks: An article from the Hindu. 2. Article on customer relationship management in banking sector by DR FB Singh. 3. Article on measuring customer Satisfaction in The Banking Industry By Dr. Manoj Kumar Das. 4. Research Methodology book. By: Priyaranjan Dash 5. State bank Intranet site (within the bank) 6. Transformation of SBI- pdf file 7. Internet Banking of SBI - pdf file 8. http://en.wikipedia.org/wiki/Customer_satisfaction 9. www.customerservicepoint.com 10. www.bankbazaar.com 11. www.apnapaisa.com 12. www.moneycontrol.com 13. www.sbi.co.in 14. www.icicibank.com 15. www.bankofindia.com 16. www.hdfcbank.com 17. www.axis.com 18. www.pnb.com 19. www.union bank.com 20. www.wikipedia.com 21. Web links from Google search engine 22. Tit bits by Mr. G.V.Rao, Chief Manager, SBI 23. Tits bits by Mr. Shasanka Sekhar Sahu, customer relation officer, Sambalpur 24. Tits bits by banking officials of other banks

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