Customer Satisfaction towards RTGS & NEFT

Customer Satisfaction towards RTGS & NEFT facilities
INTRODUCTION
INDUSTRY PROFILE
INDIAN BANKING: MILESTONE & A ROAD AHEAD
With the Indian economy moving on to a high growth trajectory, consumption levels soaring
and investment riding high, the Indian banking sector is at a watershed. Further, as Indian
companies globalize and people of Indian origin increase their investment in India, several
Indian banks are pursuing global strategies. The industry has been growing faster than the
real economy, resulting in the ratio of assets of commercial banks to GDP increasing to 92.5
per cent. The Indian banks have also been doing exceptionally well in the financial sector
with the price-to-book value being second only to china, according to a report by Boston
Consultancy Group.
1.1 PRE-INDEPENDENCE BANKING SCENARIO IN INDIA

In India, the ancient Hindu Scriptures refer to the money lending activities in the Vedic
period. During the Ramayana and Mahabharata eras, banking had become full-fledged
business activity and during the Manu Smriti period which followed the Vedic period
and Epic age, the business of banking was carried on by the members of the Vaish
Community. Banking is different from money lending but two terms have in practice
been taken to convey the same meaning. Banking has two important functions to
perform, one of accepting deposits and other of lending money or investment of funds.
During the Moguls period, metallic money was issued and the indigenous bankers
added one more line of money changing to their already profitable business. They
started exchanging money circulating in one part of the country with the money current
in another part of the country making good margin for them.
The English traders, who came to India in the 17th century, established some contracts
with the indigenous bankers by borrowing funds from them in 1786. The English
Agency House had established the Bank of Bengal at Calcutta with the advent of modern
banking conducted on western lines, the indigenous bankers lost further importance.
ACHARYA BANGALORE B-SCHOOL

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The English House Agency in Calcutta and Bombay were the bankers to the East India
Company and the European merchants in India. They had no capital of their own and
depend mainly on deposits from the public for finance. These agency houses failed as
they combined banking with trading. Among the earliest banks in established in India,
were the Bank of Bengal (1806), Bank of Bombay (1840) and Bank of Madras (1843).
These banks were also known as "presidency banks". In 1860 the concept of limited
liability was introduced in banking. These banks (presidency banks) were allowed to
issue notes to a limited extent, but this right was taken over by the government in 1862.
In view of limited liability, several joint stock banks were floated.
The swadeshi movement which started in the early 1900s gave stimulus to the growth of
indigenous joint Stock Banks.
In 1921, the 3 presidency banks were merged to form the Imperial Bank of India. During
1900 and 1950, the Indian joint stock banks specialized in providing short term credit,
for trade in the form of cash-credit and over draft facilities, foreign exchange business,
remained the monopoly of foreign banks. Between 1900 and 1925 many banks failed
due to various reasons. The Central Banking Enquiry Committee was constituted in
1929; it gave the reasons for the failure of banks such as Insufficient capital, Poor
liquidity of assets, Combination of non-banking activities with banking activities,
Irrational credit policy & incompetent and Inexperienced directors.
It gave wide power to RBI to regulate, supervise and develop the banking systems.
During 1950 to 1969 two important developments took place, first, the all India Rural
Credit Survey Committee, which examined the issue of credit availability at the rural
areas, recommended the creation or a state partnered sponsored bank entrusted with the
task of opening branches in the rural areas.
Accepting this recommendation, the State Bank of India Act was passed in 1955 and the
Imperial Bank of India was renamed as State Bank of India. Later in 1959 the State Bank
of India (Subsidiary Bank) Act was passed enabling SBI, to take over 8 princely state
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associated banks as the subsidiaries; these banks were State Bank of Bikaner, State Bank
of Hyderabad, State Bank of Indore ,State Bank of Jaipur, State Bank of Mysore, Bank
of Patiala, State Bank of Saurashtra and Bank of Travancore.
Secondly the need about wider diffusion of banking facilities and to change the uneven
distributive pattern of bank lending was realized. The scheme of social control over
banks was announced in the parliament in December 1967. The National Credit Control
Council was set up in 1968 to assess the demand for bank credit from various sector of
the economy and to determine their respective priorities in allocation.
1.2 POST-INDEPENDENCE DEVELOPMENTS IN BANKING SECTOR

On the eve of independence in August 1947, there were 648 commercial banks,
comprising 97 scheduled and 551 non scheduled banks. Development in banking sector
is divided into two separate groups namely pre-nationalize period and post nationalize
period:
1.2.1 PRE-NATIONALIZATION PERIOD

The year 1969 was a landmark in the history of commercial banking in India. In
July of that year, the government nationalized 14 major commercial banks of the
country. In April 1980, government nationalized 6 more commercial banks.
In 1951, when the First Five Year Plan (1951 - 56) was launched, the development
of rural India was accorded the highest priority. The All India Rural Credit Survey
Committee recommended. the creation of a State - partnered and State, sponsored
bank by taking over the Imperial Bank of India and integrating with it, the former
State - owned or State - associated banks. Accordingly, an Act was passed in the
Parliament in May 1955 and the. State Bank of India was constituted on July 1,
1955.
Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959 enabling
the State Bank of India to take over eight former States - associated banks as its

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subsidiaries. During the pre-nationalization period, the industrial sector claimed the
lion's share in bank credit. Within the industry, the large - scale sector cornered the
bulk of credit and the share of small - scale industries was marginal. There were
many reasons for the dominance of large industrial companies in the banking sector.
A disturbing feature of the pre-nationalization banking policy was the negligible

share of agricultural sector in bank credit. This share hovered around 2 per cent of
total commercial bank credit. The privately owned commercial banks were neither
interested nor geared to meet the risky and small credit requirements of the farmers.
Similarly, the share of other non-industrial sectors in bank credit was also low. Since
the commercial banks were under the control of big industrialists, the lendable funds
of the banks were sometimes used to finance socially undesirable activities like
hoarding of essential commodities.
1.2.2 POST NATIONALIZATION PERIOD

As already noted, leading commercial banks of the country were nationalized in 1969
with the following objectives in view:
To break the ownership and control of banks by a few business families.
To prevent concentration of wealth and economic power.
To mobilize savings of the masses from every nook and corner of the country.
To pay greater attention to the credit needs of the priority sectors like
agriculture and small industries.
The post nationalization period witnessed a remarkable expansion in the banking and
financial system. The biggest achievement of nationalization was the reallocation of
sectoral credit in favour of agriculture, small industries and exports which formed the
core of the priority sector. Within agriculture, credit for the procurement of food
grains (food credit) was a major item. Other agricultural activities preferred for credit
included poultry farming, dairy and piggeries. Certain other sectors of the economy
which also received attention for credit allocation were: professionals and self
employed persons, artisans and weaker sections of society. Conversely, there was a

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sharp fall in bank credit to large scale industries. However, the share of small scale
industry registered an upward trend.
Nationalization of commercial banks was a mixed blessing: After nationalization there
was a shift of emphasis from industry to agriculture. The country witnessed rapid
expansion in bank branches, even in rural areas. Branch expansion programme led to
mobilization of savings from all parts of the country. Nationalized banks were able to
pay attention to the credit needs of weaker sections, artisans and self - employed.
However,
bank
nationalization
created
its
own
problems
like
excessive
bureaucratization, red tapism and disruptive tactics of trade unions of bank

employees.
1.3 CURRENT ISSUES IN INDIAN BANKING

Despite substantial improvements in the banking sector, some issues have to be
addressed over time as the reform process is entrenched further. The discussion on
banking developments revolves around on a wide range of issues like:
Overall redrawing of boundaries between the State ownership of financial
entities and private sector ones.
Public sector character of the banking sector and efficiency.
Dilution of the government stake and its impact on the performance of the
banking sector.
Corporate governance in banks and other segments of the financial system.
Transparency of policies and practices of monetary and financial agencies and
accountability.
Prudential requirements of market participants together with comprehensive
and efficient oversight of the financial system.
Maintenance of best practices in accounting and auditing, as also collection,
processing and dissemination of symmetric and detailed information to meet
the market needs.
Relevance of Development Finance Institutions (DFIs).

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The commonality among these concerns has given rise to a wide recognition and
acceptance of having a set of international standards and best practices that every
systemically important country should strive to foster and implement. Financial sector
reforms, introduced in the early 1990s in a gradual and sequenced manner, were
directed at the removal of various deficiencies from which the system was suffering.
The basic objectives of reforms were to make the system more stable and efficient so
that it could contribute in accelerating the growth process.
In response to reforms, the Indian banking sector has undergone radical
transformation during the 1990s. Reforms have altered the organizational structure,
ownership pattern and domain of operations of institutions and infused competition in
the financial sector. The competition has forced the institutions to reposition
themselves in order to survive and grow. The extensive progress in technology has
enabled markets to graduate from outdated systems to modem market design, thus,
bringing about a significant reduction in the speed of execution of trades and
transaction costs.
With the increasing integration of various segments of financial markets, the
distinctions between banks and other financial intermediaries are also getting
increasingly blurred. Another important aspect of reforms in the financial sector has
been the increased participation of financial institutions, especially banks, in the
capital market. These factors have led to increased inter - linkages across financial
institutions and markets. While increased inter - linkages are expected to lead to
increased efficiency in the resource allocation process and the effectiveness of
monetary policy, they also increase the risk of contagion from one segment to another
with implications for overall financial stability. This would call for appropriate policy
responses during times of crisis. Increased inter - linkages also raise the issue of
appropriate supervisory framework.
Banking sector reforms in India are grounded in the belief that competitive efficiency
in the real sectors of the economy will pot realize its full potential unless the banking
sector was reformed as well. Thus, the principal objective of banking sector reforms
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was to improve the allocative efficiency of resources and accelerate the growth
process of the real sector by removing structural deficiencies affecting the
performance of banks.
In India, while the banking system continues to play a predominant role, it is
significant to note that, as a result of various reform measures, the relative
significance of financial markets has increased. This augurs well for the overall
stability of the financial system. The East Asian crisis has also underlined the need for
a balanced financial system wherein financial markets also play an important role in
providing necessary liquidity, especially during times of crisis. Banking system also
requires liquidity in times of stress, which only deep and liquid financial markets can
provide.
1.4 TYPES OF E-PAYMENTS

1. Electronic Clearing Service (ECS Credit)
2. Electronic Clearing Service (ECS Debit)
3. Credit & Debit Cards
4. National Electronic Funds Transfer (NEFT)
5. Real Time Gross Settlement (RTGS)
1.5 NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT)

NEFT is a facility provided to bank customers to enable them to transfer funds easily
and securely on a one-to-one basis. It is done via electronic messages. In order to
speed up the transactions there are up to 6 transactions in one day. Even though it is
not on real time basis like RTGS (Real Time Gross Settlement), NEFT facilities are
available in 30,000 bank branches all over the country and work on a batch mode.
NEFT has gained popularity due to it saving on time and the ease with which the
transactions can be concluded. This reflects from the fact that 42% of all electronic
transactions in the 2014 financial year were NEFT.
National Electronic Funds Transfer (NEFT) NEFT is electronic funds transfer system,
which facilitates transfer of funds to other bank accounts in over 63000 bank branches
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across the country. This is a simple, secure, safe, fastest and cost effective way to
transfer funds especially for Retail remittances.
1.5.1 FEATURES OF NEFT

Customers can remit any amount using NEFT Customer intending to remit money
Through NEFT has to furnish the following particulars:
IFSC (Indian Financial System Code) of the beneficiary Bank/Branch
Full account number of the beneficiary
Name of the beneficiary.
1.5.2 BENEFITS OF NEFT

NEFT is an electronic funds transfer process used in India that allows users to easily
transfer money in a very short time. The NEFT process has numerous associated
advantages for both business and individuals. A couple of these benefits are listed here
below:
SECURE AND EFFICIENT
The NEFT process is highly efficient and it allows seamless movement of money or
transfer from a certain bank to the next. Furthermore, the entire process is regarded as
highly secure. This means there are fewer chances of errors occurring during the
whole process.
LOW COST
The other benefit that has many people considering NEFT as their main technique of
transferring money is the low cost it charges. In fact, the costs involved during the
NEFT process are much lesser compared to when you make demand drafts or pay
orders. Hence, many small businesses in India are now using NEFT due to its
economical nature.

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HIGHLY RELIABLE
NEFT is highly reliable and this is attributed to the fact the Indian reserve bank is the
main coordinating agency of this process. This greatly reduces any likelihood of
discrepancy when making financial transactions between various banks. That is the
reason NEFT transactions cannot be revoked, since it has a high accuracy level.
ELIMINATES DELAYS
NEFT transactions are designed to eliminate the normal delays associated with fund
movements in general. This is because all transactions are quickly settled within one
day from the start of the transaction. This means your customers or clients will get
their money on time once it has been sent to their respective accounts.
Since the entire NEFT process is completely paperless, it helps lessen the need to cut
trees for producing paper. Hence, NEFT is environmentally friendly. Furthermore, it is
also risk free since fund transfers are processed and immediately settled within one
day.
1.6 REAL TIME GROSS SETTLEMENT (RTGS) SYSTEM

RTGS is a fund transfer systems where transfer of money or securities takes place
from one bank to another on a real time and on gross basis. Settlement in real
time means payment transaction is not subjected to any waiting period. The
transaction is settled on one to one basis without bunching or netting with any other
transaction. Once processed, payments are final and irrevocable. This was introduced
in 2004 and settles all inter-bank payments and customer transactions above 2 lakhs.
The development of RTGS systems started as a response to the growing awareness of
the need for sound risk management in large-value funds transfer systems. RTGS
systems offered a powerful mechanism for limiting settlement and systemic risks in
the inter-bank settlement process, because these risks effect final settlement of
individual funds transfers on a continuous basis during the processing day. In
addition, RTGS can also contribute to the reduction of settlement risk in securities and
foreign exchange transactions by providing a basis for Delivery-Versus-Payment
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(DVP) or Payment-Versus-Payment (PVP) mechanisms. An understanding of RTGS is
thus essential when considering risk management in payment and settlement systems.
The RTGS system is primarily meant for large value transactions. The minimum
amount to be remitted through RTGS is Rs. 2 lakh. The maximum limit is Rs. 10 lakh
per day.
The RBI first implemented the RTGS in March 2004 as a major technology based
electronic funds transfer system across the country. The RTGS infrastructure is critical
in facilitating the orderly settlement of payment obligations.
In August 2013, the RTGS saw 62.10 lakh transactions (including customer
transactions, inter-bank transactions and inter-bank clearing) aggregating to Rs.
67,55,735 crore.
1.6.1 FEATURES OF RTGS
A modular component structure to meet individual country requirements and for

flexibility in growth and expansion as needs arise.
Final and irrevocable settlement of funds transfers continuously in real-time.
Centrally located queuing of payments that are held awaiting availability of funds.
Automatic gridlock resolution.
Complete monitoring of account balances for both the Central Bank and
participating institutions.
Credit and intra-day liquidity management facilities.
Maintenance of a statistical database with query and reporting facilities.
Payment entry and processing using standard SWIFT message formats.
A multi-currency and multi-lingual system.
Secure payment and message transmission using the SWIFT services & secure
interactive communication for monitoring & queue management.
Operational reliability with backup and contingency arrangements.
Complete audit trail, recovery and reporting facility.

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1.6.2 BENEFITS OF RTGS
Hassle-free high value settlement: Elimination of collection through physical H/V

clearing.
Eliminates Settlement Risk & Systemic Risk
Speed: Guaranteed and fast settlement of transactions.
High Liquidity: Lower of interest costs.
Reduces paper work and improves efficiency.
1.6.3 ABILITY TO LIMIT PAYMENT SYSTEM RISK

RTGS systems can contribute substantially to limiting payment system risks. With
their continuous intraday final transfer capability, RTGS systems are able to minimize
or even eliminate the basic interbank risks in the settlement process. More
specifically, RTGS can substantially reduce the duration of credit and liquidity
exposures. To the extent that sufficient covering funds are available at the time of
processing, settlement lags will approach zero and so the primary source of risks
interbank funds transfers can be eliminated. Once settlement is effected, the receiving
ban can credit the funds to its customers, use them for its own settlement purposes in
other settlement systems or use them in exchange for assets immediately without
facing the risk of the funds being revoked. This capability also implies that, if an
RTGS system were linked to other settlement systems, the real-time transfer of
irrevocable and unconditional funds from the RTGS system to the other systems
would be possible. The use of RTGS could therefore contribute to linking the
settlement process in different funds transfer systems without the risk of payments
being revoked.

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1.7 DIFFERENCES BETWEEN RTGS & NEFT
RTGS is based on gross settlement while, NEFT is based on net settlement. Gross
settlement is where a transaction is completed on a one-to-one basis without bunching
with other transactions. As for a Deferred Net Basis (DNS), or net settlement, this is
where transactions are completed in batches at specific times.
In NEFT, all transfers will be held up until a specific time whereas RTGS transactions
are processed throughout the working hours of the system.
RTGS transaction involve large amounts of cash, basically only funds above Rs.
1,00,000 may be transferred using this system. For NEFT, any amount below Rs.
1,00,000 may be transferred, and this system is generally for smaller value
transactions involving smaller amounts of money.
RTGS processes in real-time (Push Transfer), while NEFT processes in cycles during
the given working day. This causes a NEFT transaction that is initiated later than the
last cycle to be completed the next day.

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COMPANY PROFILE
2.1 HISTORY
The Karnataka State Co-operative Apex Bank Limited (hereinafter referred to as the
Bank) is a Scheduled Co-operative Bank incorporated under the Karnataka State Cooperative Societies Act 1959. It was established in the year 1915 is entering its
Centenary year during next year. During the year in its inception the Bank had deposits
of Rs.1.26 lakh, owned funds of Rs. 0.54 lakh and working capital of Rs.1.80 lakh.
During the last 99 years the bank has achieved significant development and considered
one of the premier State Co-operative Bank in the country. Our Bank is known for its
commitment for the development of farmers in the state and also Primary Agricultural
Credit Co-operative Societies and District Central Co-operative Banks.
Today it has 42 branches in Bangalore City through which it carries out commercial
banking activities. It does not have any branches outside Bangalore.
The Bank was registered on 10th November 1915 under the name and style of The
Mysore Provincial Cooperative Bank Limited, under the Mysore Co-operative Societies
Act of 1905. Then, the Bank was not an Apex institution, as it was not exclusively meant
for financing the co-operatives in the State of Mysore. Another Bank called the
Bangalore Central Co-operative Bank Limited, Bangalore (which was later converted
into an urban bank), which was registered in 1905, was also financing the co-operatives.
The bank owes its origin to Sri. M.A. Narayan Iyengar, B.A., B.L., who was the
Registrar of Co-operative Societies at that time.
The bank was founded with the objective of financing, inspecting and supervising the
Co-operative societies in the Mysore State. Subsequently, several district co-operative
central banks with the jurisdiction of a district were registered. Five such district central
banks were started. But their working was not satisfactory and they become defunct.

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As such the provincial bank started financing the societies directly. Besides granting of
loans, the bank served as an outlet for investment of the surplus finds of the co-operative
societies in the state. The bank thus acts as the balancing centre of the co-operative
movement in the state, safeguarding its interests.
2.2 REORGANIZATION OF PROVISIONAL CO-OPERATIVE INTO AN

APEX BANK
At the time of inception of the Mysore Provincial Co-operative Bank, there was also
another co-operative organization, the Bangalore Central Co-operative Bank, which was
working on similar lines. This was an anomaly, which led to mutual competition
unnecessarily in the matter of financing of co-operative societies. In order to remove this
anomaly and to have only one institution as an Apex institution exclusively for financing
the co-operatives in the state, the government appointed and enquiry committee known
as the Mysore Co-operative Enquiry Committee, 1920-22 presided over by Mr.
Lallubhai Samaldas and the committee after reviewing the position of these two banks,
made the following three alternative recommendations to the government:
To amalgamate the Mysore Provincial Co-operative Bank and the Bangalore

Central Co-operative Bank.
To create a new Apex Bank.
To convert the Central Co-operative Bank into an urban bank dealing only with
the individuals and to reorganize the Provincial Co-operative Bank into a new
Apex Bank
.
2.3 PRINCIPAL FUNCTIONS OF THE APEX BANK

Financing of Short Term Loans for Seasonal Agricultural Operations and for
marketing of crops. These loans are repayable within one year.
During the year 2011-2012, Apex Bank has disbursed total loans of Rs.4423.28
crores of which Rs. 3736.37 crores for Agricultural purposes and Rs. 687.11 crores
for Non-Agricultural purpose.

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Advancing Medium Term Loans for the development of agricultural infrastructure
such as Lift Irrigation, Dairy, Poultry, Plantations, Gobar Gas, etc under schematic
lending.
Providing cash credit loans to processing, marketing and consumer co-operatives as

well as sugar factories in Karnataka and also term loans to sugar factories under
consortium arrangements.
Advancing Working Capital Loans to state levels co-operatives like MARKFED,

KCCF and to the national level co-operatives such as IFFCO and KRIBHCO. The
bank provides similar facilities to public sector undertakings like Food Corporation
of India through consortium arrangements with commercial banks and at times
directly.
The Bank extends finance to non-farm sector and for the development of cottage
industries, small scale industries and rural artisans and weavers. It is a Scheduled
Bank in all respects including remittances of funds by Demand draft, Mail transfers,
Collection of cheques and Drafts.
2.4 REAL TIME GROSS SETTLEMENT (RTGS) AND NATIONAL

ELECTRONIC FUNDS TRANSFER (NEFT)
RTGS system is primarily for large value money transaction. The minimum amount to be
remitted through RTGS is Rs. 2 lakhs and below Rs. 2 lakhs can be transferred through
NEFT.
RTGS is the fastest, cheapest and has left free system of transferring money from one
account in difference places. RTGS is now implemented in Apex Bank. Apex Bank is the
fourth State Co-operative Bank in India in implementing RTGS.

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RTGS or NEFT form

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2.5 QUALITY OBJECTIVE
The main aims and objectives of the Bank defined in the Bank Bye Law No. III are
given below.
a. To serve as a State Co-operative Bank and as a balancing center in the State of
Karnataka for registered co-operative societies;
b. To raise funds by way of deposits, loans, grants, donations, subscriptions, subsidies
etc. for financing the members by way of loans, cash credits, over-drafts and
advances;
c. To develop, assist and co-ordinate the member DCCBs and other Co-operative
Societies and secure financial assistance for them;
d. To participate in financing Co-operative and other institutions who are members of
the bank, directly or through consortium of Bankers;
e. To participate in the schematic lending and to provide loans for which refinance
facility is available with term lending institutions.
f. To arrange for the inspection and supervision of the affiliated DCCBs and other
Co-operative Societies and guide them in their working;
g. To buy and sell securities for the legitimate investment of surplus funds and act as
agents for buyers and sellers of securities of Central/State;
h. To carry on general business of Banking and other banking activities to the
members and customers;
i. To purchase, acquire or raise or otherwise obtain moveable or immoveable
property for the own use of the Bank and also to dispose them of when not
required;
j. To take measures to help Co-operative Education;
k. To promote and undertake Co-operative Research and Co-operative Development;
l. To manage, sell or release any property which may come into the possession of the
bank in satisfaction of or part satisfaction of any of its claims;
m. To promote economic interest of the members of the Bank in accordance with the
principles of Cooperation.
n. To do such other things as are incidental or conducive to the promotion and
advancement of the business of the Bank

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2.6 APEX VISION
Equitable and sustainable micro financial inclusion for overall rural prosperity through
meaningful utilization of Human Endeavour and Capital.
2.7 APEX MISSION

Equitable and sustainable micro financial inclusion for overall rural prosperity through
meaningful utilization of Human Endeavour and Capital.
2.8 OBJECTIVES OF THE KSC APEX BANK
Helping farmers to get irrigation, dairy, poultry facilities and advancing working capital
loans to national level co-operative.
Financial to non-for sector for development of cotton industries rural artisans and
weavers
Bank carries all the banking transaction like remittances of funds by demand drafts, mail
transfer, collection of cheques and drafts, issue of consumer loans, vehicle loans, housing
loans, salary earners loans and gold loans etc.
Bank monitors the inland mutual arrangement scheme under which money remittances a
cheques are facilities between members banks.
Establishing banks presence in all district of Karnataka.
2.9 DOMAIN NETWORK :

State Level - Karnataka State Co-operative Apex Bank Ltd. (KSCAB)
District Level - District Central Co-operative Banks (DCCBs)
Block, Taluk & Hobli Level - District Central Co-operative Banks Branches
(DCCBBs)
Village Level - Primary Agricultural Credit Co-operative Societies (PACS)

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2.10 ACTIVITIES OF THE BANK
Financing short-term (agriculture) loans for crop production and marketing of

crops and advancing Medium Term Loans for development of agricultural
infrastructure such as lift irrigation, dairy, poultry, plantation, gobar gas etc.
Extending cash credit loans to processing, marketing and consumer co-operatives

as well as sugar factories in Karnataka.
Advancing term loans to new co-operative/Private sugar factories under

consortium arrangement in Karnataka.
Advancing working capital loans to sugar factories, state level cooperatives and
to national level cooperatives such as IFFCO, KRIBHCO and to state level
undertakings through consortium arrangements with commercial banks.
Financing to non-farm sector for development of cottage industries, small scale

industries and rural artisans and weavers.
To carry on general business of Banking like remittances of funds by DD, Mail

Transfer, Collection of Cheques and Drafts, issue of consumer loans, vehicle
loans, housing loans, salary earners loans and gold loans and other banking
activities to the members and customers.
To monitor the Inland Mutual Arrangement Scheme under which money

remittances and collection of bills and cheques are facilitated between member
banks The Bank is a member of All India Mutual Arrangement Scheme, whereby
money remittances could be made and DDs issued as well as Bills and Cheques
sent for collection throughout India. Similarly, Mail Transfers and Bills
Collection are facilitated from any part of the country to Apex Bank.
2.11 BOARD OF DIRECTORS

According to the Karnataka Cooperative Societies Act and Byelaws of the Bank,
function of the Bank is regulated by the Board of Directors of the Bank consisting of
one elected nominees of each District Central Cooperative Banks and Government
Nominees. The Board is headed by the President followed by Vice President,
Managing Director. The Chief General Manager, National Bank for Agriculture and

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Rural Development Bank and Registrar of Cooperative Societies are also among the
Board of Directors, and are Government Nominees.
The Board Meeting is convened once in a month. The Executive Committee Meeting
is convened once a month.
In addition, the bank is also having Sub Committees consisting of Board of Directors
in each Committee to monitor the functions of the Bank and District Central
Cooperative Banks.
2.12 PRODUCTS AVAILABLE BY APEX BANK

2.12.1 DEPOSIT SCHEMES AT ATTRACTIVE RATES OF INTEREST
Term Deposit
Savings Bank Account
Current Account
Remittances
2.12.2 LOAN PRODUCTS AT ATTRACTIVE RATES OF INTEREST

1. Site Purchase Loan
Purchase of sites at Bangalore.
2. Cash Credit Facility

This loan is for helping traders to carry on business by availing working capital
facility from the Bank.
3. Commercial Vehicle
The Bank provides loans to purchase vehicle for commercial use only.
4. Professional Loan

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A loan product specially designed to offer security based and hassie free financial
assistance to professionals and self-employed persons.
5. Apex Professional
Personal loans to Doctors, Engineers, Architects and also to prompt Income Tax
payees.
6. Apex Pension
Loan for pensioners to meet Medical expenses, other genuine needs and emergent
personal expenses.
7. Apex Gold
Loans to individuals for purchase of Gold jewellery.
8. Apex Self Employment

Terms loans and working capital loan for purchase of Tools.
Loan to Auto-mechanics / Electricians / Plumbers and Carpenters engaged
in servicing & repairing, to meet their working capital requirements.
Self-employed persons who are engaged in servicing and repairs.
9. Apex Women
Loan sanctioned to women to meet their genuine personal needs like buying
household articles, gifts and jewellery.
10.Apex Retail
The loan for petty traders.
11. Apex Overdraft

Loans to individuals pursuing such activities like Retail trade, Small
Business and professionals.
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Loan against the security of National Saving Certificate/Life Insurance
Corporation policy/Gold Ornaments, etc.
12.Apex Rent
Loan based on the rental income of the property Rented/leased out to
Central/State/Semi Government / Banks / Financial Institutions and Multinational
Companies.
13.Apex Travel
To meet travel and lodging expenses of individuals for travel in india and abroad
either through personally arranged tours or through conducted tours.
14. Apex Education

Educational loan to deserving/meritorious students for pursuing higher education
and professional courses in India and abroad in reputed Universities/Institutions.
15. Apex Cash

Loan against approved Bonds like RBI/NABARD/Other Government Bonds.
16. Apex Personal

Loan scheme for employees of Corporates-Professionals can avail this loan.
17. Advance Against NSCs

The Bank provides advances against NSCs to the residents of Bangalore city.
18. Jewel Loan

The Bank provides Jewel Loan against pledge of gold ornaments to the residents
of Bangalore city.
19. Vehicle Loan

The Bank provides loans to purchase two wheelers/four wheelers for personal use
only.
Page 22
20. Home Loan

The housing finance services offered by the Bank include Construction of
House / Mortgage Loan, Site purchase / Mortgage Loan, Purchase of Flats etc., to
the public through its network of 42 branches in Bangalore City.
Residents of Bangalore city are eligible for housing under certain rules. Persons
applying for loans for construction of house, additional/repairs to the existing
House/Flat, purchase of House/Flats, Site Mortgage/purchase Loan etc. within
the limits of Bangalore City Corporation, BDA, BMRDA, Revenue Villages,
BIAPA & Municipalities coming under the jurisdiction of BMRDA/BIAPA &
Bangalore Rural District & Ramanagara District are eligible for loan.
21. Installment Loan

The Bank provides Personal Loans to salaried people living within Bangalore
City, to meet expenses such as education of children, medical expenses of self
and family, purchase of household articles etc.
2.12.3 VALUE ADDED SERVICES

Bank Guarantee
Bills
Safe Deposit Lockers
DDs under IMAS
DDs under AIMAS
2.12.4 INSURANCE SERVICES

Vehicle Insurance
Fire/Earthquake Insurance
Apex Gold SB Account

Page 23

2.13 COMPETITORS
1.
Shamrao Vital Co-Operative Bank
2.
Commercial Banks
3.
Corporate Banks
2.14 MILESTONES ACHIEVED/AWARDS RECEIVED
Bank is able to lend 75% of the state and it covers all sugar factories in
Karnataka.
Apex Bank is habituated to get awards at National levels year after year similarly.
NABARD has been performance award and even PACS have not have logged
behind in getting national recognition. All DCC banks and merely 80% of PACS
have proved themselves to be financially viable.
Nearly 40% of the loans have been advanced to weaker section/SC/ST and
agricultural labourers.
RTGS (Real Time Gross Settlement) system has been implemented in view of
speedy transfer of funds.
Bank has entered an agreement with Oriental Insurance Company Ltd., to sell
various insurance
2.15 AREA OF OPERATION

Apex bank works in the regional level only. It does not work in national level. The
area of operation covers the entire Bangalore. It has 42 branches in Bangalore and
headquartered in Pampa Mahakavi Road, Chamarajpet. The branches of office bank
are adequately delegated with power of sanction of disbursements. If the loans are to
be provided up to 10 lakhs it is handled by concerned branch offices but if is more
than 10 lakhs then it is handled by main branch.

Page 24
2.16 OBJECTIVES OF THE STUDY
To understand the NEFT and RTGS facilities provided by the KSC Apex bank.
To identify various customers involved in the transaction using NEFT and RTGS.
To find customer satisfaction towards banking services on NEFT and RTGS.
To provide the findings, suggestions to increase the effectiveness of KSC Apex

bank internet banking services to customers.
2.17 SCOPE OF THE STUDY

The study is made by considering the entire APEX bank. It investigates about all
applications of online banking in APEX. It would help society to understand the
usefulness of online banking. The study will also help to get the knowledge about
process of internet banking and usefulness to banking industry and know about
customers satisfaction level or reliability on it. As the study contains the 360 degree
information regarding APEX bank and its internet banking.
2.18 LIMITATIONS OF THE STUDY

The study has to complete within a short span of time prescribed.
Findings are based on the records available at the organizations and the information
provided by the company.
As the managers were busy in their daily schedules it was not possible for me to
spend more time in interaction and discussion with them.
2.19 RESEARCH METHODOLOGY

The study is descriptive in nature. The branch of the bank was selected by convenience
and for the sake of access to the qualitative information. All the information collected
through the books maintained by bank, through questionnaire, from the employees and
also from the website of the bank.
The methodologies follow collecting information by using two sources of data namely:
Primary data
Page 25

Secondary data
PRIMARY DATA
Primary data are the data collected for the first time and not available in the secondary
source. The primary data is obtained through questionnaire with the officers of the KSC
Apex Bank Ltd.
SECONDARY DATA
The source of secondary data is published materials such as text book, periodicals,
journals, newspaper and annual reports of the KSC Apex Bank Ltd.
The following are the data sources through which the data have been collected.
The training and guidance material supplied to the staff of the branch
Online content of the banks website.
Brochures issued by the bank.
Prospectus issued by the bank.
Several websites on RTGS & NEFT.
2.19.1 SAMPLING TECHNIQUES

The significant component of a research study is the samling plan. Sample is the
fraction of production. Sampling is a techniques or method or selection of samples.
The researcher has adopted the appropriate technique in a domestic research that is
simple random sampling.
Simple Random sampling is a good technique when there are comprehensive lists of
the target population. Random sampling should be used when generalization is the
objective of the study and a greater degree of accuracy of estimation of population
parameters is required.
Sampling size: The sample size adopted for the study is 40 respondents.
Sample procedure: Sample procedures through structured questionnaire.
2.19.2PLAN OF ANALYSIS
The primary data collected from the respondents were evaluated manually. Firstly,
data was analyzed from each area and finally a consolidated analysis was made,

Page 26

percentage was calculated and used to estimate the proportion of the response for
different aspect under consideration.
LITERATURE REVIEW
3.1 REVIEW OF LITERATURE: INTRODUCTION
Generally, a researcher conducts and surveys the related literature in order to review the
present status of a particular research topic. From the survey of literature, a researcher is
able to know the quantum of work already done on his research topic so far not touched,
or yet to be undertaken. The overview of literature at the national or an international
level is to be researched with the help of research reports, articles, books and other
materials. The major benefits of literature reviews are: firstly, helps the researcher in
avoiding duplication of efforts on the same research topic. Secondly, helps the researcher
in adopting methodologies used successfully by other researchers, writers and policy
makers. Thirdly, suggests new approaches in planning, organizing the investigation of
research topic. Fourthly, helps to narrow down the research problem more clearly and
sixthly, assists investigators to develop firm understandings of theoretical implications of
proposed inquiries.
This study contributes to literature by focusing Customer Satisfaction towards RTGS &
NEFT. The aim of literature reviews is to justify, rationale of an ensuring research study,
provides an overview of historical perspectives and to bring to the light the research
trends and problems.
The present study identifies an ample number of research works at global level in
general but at domestic level very few studies have been reviewed and found most
appropriate on customer satisfaction towards RTGS & NEFT. The contribution of
various researchers, policy-makers and writers to this area has focused on explaining the
process of the RTGS & NEFT and satisfaction of the customer with the service, their
challenges, advantages, disadvantages, herewith, the study, in brief summary and present
some of them in a descending order as year of publication.

Page 27

Raopun (2005), evaluated the level of internet banking services in Thailand and
compared the overall satisfaction of banking facilities like NEFT, RTGS. The author
used eight dimensional quality model given by David A. Garvin, namely, performance,
features, reliability, conformance, durability, serviceability, aesthetics and perceived
quality. The results of the study indicated that reliability, security system and information
accuracy were the most important perspectives and least important was the perceived
quality of commercial bank. The results of the study could be used as a guideline to set
up a form of service in order to satisfy the needs of target group accurately and
appropriately.
Erickson et al. (2005), studied the technology acceptance of banking facilities in
Estonia. The objective of the study was to see that to what extent customers accept
RTGS and NEFT as a tool for the satisfaction. The findings of the study suggested that
RTGS and NEFT proved to be beneficial for the customers to some extent. However,
banks need to put much efforts not only into making a user friendly banking facilities,
but also to explain their customers how the bank facilities was useful to them.
Balwinder Singh and Malhotra .P (2004), examined the impact of online banking. The
objective of the study was to find who uses internet, why and where. It also examined
the respondents reasons for not using banking online. The data was collected from two
universities of Kwazunatal. The researcher analyzed that males use more online banking
than females. Main services used through websites were inter-account transfer, paying
accounts, checking balance/ statement, communication with the banks, etc. Security was
the main issue for not using banking online. The author suggested that to make online
banking more adaptive, websites should be more attractive, more informative and
colourful. Training should be given to customers. Charges of online facilities should also
be less. Banks should advertise and publicize their new products and services offered on
the websites so as to make online banking more popular among customers.
Milind Sathye (1999), in his research paper, explored the factors affecting the adoption
of online banking by Australian customers. The author stated that online and other
virtual banking had significantly lower the cost structure than traditional delivery
channels. So, the banks should encourage customers to use internet for banking
Page 28

transactions. The author also emphasized that for adoption of online banking, it was
necessary that the banks offering this service made the consumers aware about the
availability of such a product and explain how it adds value to the other products.
However, internet should be considered as a part of overall customers service and
distribution strategy. These measures could help in rapid migration of customers to
online banking resulting in considerable saving of operating costs of banks.
Marius Dannenberg, Dorothee Kellner (1998), overviewed the opportunities for
effective utilization of the Internet with regard to the banking industry. The authors
evaluated that appropriate application of todays cutting edge technology could ensure
the success of banks in the competitive market. They evaluated the services of banks via
internet as websites provide sophisticated line of products and services at low price. The
authors analyzed that transactions via internet reduce the risk of data loss to customers,
chance to cut down expenses, higher flexibility for bank employees, re-shaping the
banks image into an innovative and technologically leading institutes, etc.
3.2 NEED FOR THE STUDY

New era treats customers as a God. This study helps KSC Apex bank to identify the
needs of customers in the usage of RTGS & NEFT facilities and so to improve on the
flexibility of RTGS & NEFT facilities to all the customers. Therefore, this is an attempt
to enhance customer point-of-view to help successfully handling RTGS & NEFT
facilities and make use at the core.

Page 29
DATA ANALYSIS AND INTERPRETATION

4.1 AGE OF THE RESPONDENT
Table 4.1: Showing the age of the respondents
AGE (in years)
RESPONDENTS
PERCENTAGE (%)
Below 30
20
50
31-45
16
40
46-60
Above 61
Total
Source: From Survey
40
100
ANALYSIS: The respondents are mainly classified as less than 30, 31-45,
46-60 and above 61 years. This type of classification is done only in order to
know which age group are more into the usage of NEFT and RTGS system.
Graph 4.1: Showing the age of the respondents

Page 30
INTERPRETATION: In the considered respondents, 50% of the respondents belong to the

age group of less than 30 years, 40% of them are between 31 to 45 years, 7% of them are
between 46 to 60 years and 3% of them are above 61 years.
4.2 QUALIFICATION OF THE RESPONDENT

Table 4.2: Showing the qualification of the respondents
QUALIFICATION
RESPONDENTS
PERCENTAGE (%)
Up to Higher Secondary
Graduate
19
47
Post Graduate
18
45
Professional
40
100
Total
Source: From Survey
ANALYSIS: The respondents are mainly classified as Upto Higher Secondary,

Graduate, Post Graduate and Professional. This type of classification is done
only to know the education qualification of NEFT and RTGS users.

Page 31

Graph 4.2: Showing the qualification of the respondents
INTERPRETATION: The findings reveal that 3% of the respondent is professional; 45%

are post graduate; 47% are graduate and 5% have secondary education. The findings
therefore imply that most of the respondents of Apex Bank are Graduate and Post Graduates.

Page 32

4.3 PROFESSION OF THE RESPONDENT
Table 4.3: Showing the profession of the respondents
PROFESSION
RESPONDENTS
PERCENTAGE (%)
Unemployed
Job in Public Sector
16
40
Job in Private Sector
20
50
Business Entrepreneur
10
40
100
Total
Source: From Survey
ANALYSIS: The respondents are mainly classified as Unemployed, Job in Public

Sector, Job in Private Sector and Business Entrepreneur. This type of
classification is done to know the profession of the respondents accessing NEFT
and RTGS payment systems.
Graph 4.3: Showing the profession of the respondents
INTERPRETATION: The findings reveal that 10% of the respondents are business
entrepreneur; 50% works in Private Sector: 40% in Public Sector and none of them are

Page 33

unemployed. The findings therefore imply that all of the respondents of Apex Bank are
working.

Page 34

4.4 GROSS MONTHLY INCOME OF THE RESPONDENT
Table 4.4: Showing the monthly income of the respondents
INCOME
RESPONDENTS
PERCENTAGE (%)
Below 20,000
20
50
20,001-40,000
16
40
40,001-60,000
Above 60,001
Total
Source: From Survey
40
100
ANALYSIS: The respondents are mainly classified as less than 20,000; between
20,001 to 40,000; 40,001 to 60,000 and more than 60,001. This type of
classification is done to know which income level of the respondents accessing
NEFT and RTGS payment systems.
Graph 4.4: Showing the monthly income of the respondents
INTERPRETATION: The findings reveal that 50% of the respondents have below
20,000 income; 40% have 20,001 to 40,000, 5% of the respondents have 40,001 to 60,000

Page 35

and 5% of the respondents are getting more than 60,001 incomes. The finding therefore
implies that income less than 20,000 are more users of RTGS and NEFT.

Page 36

4.5 USAGE OF INTERNET BANKING SERVICES
Table 4.5: Showing the usage of internet banking services
NO. OF YEARS AS
CUSTOMER OF THE
BANK
RESPONDENTS
PERCENTAGE (%)
< 5 years
21
52
5 years - 10 years
12
30
11 years - 15 years
> 15 years
10
40
100
Total
Source: From Survey
ANALYSIS: The respondents are mainly the customers of bank for a period less
than 5 years, 5 to 10 years, 11 to 15 years and more than 15 years. This type of
classification is done to know the awareness of internet banking facilities.
Graph 4.5: Showing the usage of internet banking services
INTERPRETATION: The findings reveal that 52% of the respondents are using internet
banking services less than 5 years, 30% of them from 5 to 10 years, 8% of 11 to 15 years and
Page 37

10% from more than 15 years. The findings are therefore implying that internet banking
services are need to be make much aware to use.
4.6 NUMBER OF NEFT USERS

Table 4.6: Showing the number of NEFT users
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
32
80
No
20
Total
40
Source: From Survey
100
ANALYSIS: The above table shows the number of NEFT users among the
selected respondents. Out of that 80% of the sample is currently using the NEFT
facility and remaining 20% are not using or not aware of using this mode of
payment system.
Graph 4.6: Showing the number of NEFT users
INTERPRETATION: From the above graph, we can come to know that there are users of
NEFT system i.e., 80% of the population are using this system but 20% are not using or not

Page 38

aware of using this mode of payment system. So it can be interpreted that only 20% of the
sample are not using NEFT as a mode of transferring the money.

Page 39

4.7 FREQUENCY OF THE USAGE OF NEFT SYSTEM
Table 4.7: Showing the frequency of the usage of NEFT system
FREQUENCY
RESPONDENTS
PERCENTAGE (%)
Once in a week
12
Once in a month
19
Very often
10
31
Once in quarter
12
38
Total
Source: From Survey
32
100
ANALYSIS: The above table shows the frequency of the usage of transferring of
their funds through NEFT. It can be considered as Once in a week, Once in a
month, Very often or Once in quarter. Based on their requirement the respondents
use this NEFT system as a mode of the payment system.
Graph 4.7: Showing the frequency of the usage of NEFT system
INTERPRETATION: It is observed that 12% of the respondents frequently uses NEFT

system ie., once in a week, 19% of the respondents use once in a month, 31% use very
often, 38% of the respondents use once in quarter. By this we can interpret that though the
Page 40

users of NEFT are more among the selected population, but the frequency of users are very
less i.e., once in quarter.
4.8 THE EXPERIENCES OF THE RESPONDENT WHEN USING NEFT

FACILITIES & HOW SOON THEY RECEIVE CREDIT/DEBIT IN
THEIR ACCOUNT
Table 4.8: Showing the credit/debit receive in their account through NEFT
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
> 2 hours
18
56
< 2 hours
12
38
Others
32
100
Total
Source: From Survey
ANALYSIS: The above table we can analyze that the respondents who are using
NEFT system, their experiences while using the system and also in how many
hours or time span the amount will be credited or debited in their account and it is
broadly classified as more than 2 hours, less than 2 hours or any other.
Graph 4.8: Showing the credit/debit receive in their account through NEFT

Page 41
INTERPRETATION: From the above graph, we can interpret the 56% of the respondents
using NEFT facilities for the purpose of transferring money receive a credit/debit in their
account in more than 2 hours, 38% receive less than 2 hours and 6% of them receive in
more than 4 hours due to some technical issues.
4.9 RESPONDENTS OPINION OR DIFFICULTY WHILE FILLING

THE NEFT FORM
Table 4.9: Showing the opinion or difficulty while filling the NEFT form
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
14
44
No
18
56
32
100
Total
Source: From Survey
ANALYSIS: The above table we can come to know the opinion of the respondents
while filling the NEFT form. The difficulty in filling the form can be classified as
Yes or No which states that whether the respondents are facing difficulty while
filling the form or they does not have any difficulty while filling it.
Graph 4.9: Showing the opinion or difficulty while filling the NEFT form

Page 42
INTERPRETATION: From the above graph we can come to know that 56% of the selected
respondents dont have any difficulty while filling the NEFT form and 44% of them found
the difficulty in filling it. By this we can interpret that majority of the respondents dont have
any difficulty filling the NEFT form.

Page 43

4.10 TYPE OF CUSTOMERS USING NEFT TRANSACTIONS IN THE
BANK
Table 4.10: Showing the type of customer who uses NEFT on a large basis
TYPE
RESPONDENTS
PERCENTAGE (%)
Business
25
Government Employees
Retired Persons
Others
20
63
32
100
Total
Source: From Survey
ANALYSIS: The above table we can analyze that type of customer a banker may
have who use NEFT transactions on a larger basis. The type of customer may be
divided as businessmen, government employees, retired persons and others.
Graph 4.10: Showing the type of customer who uses NEFT on a large basis
INTERPRETATION: For the above graph we can interpret that 25% of the businessmen
and 63% others are using this facility on a larger basis. Only 6% of government employees

Page 44

and 6% of retired persons are negligible in number as they may not be having any such large
transactions to happen. So to conclude we can say that businessmen and others are the people
who use NEFT on a larger basis.
4.11 DEFICIENCIES IN THE USAGE OF NEFT FACILITIES

Table 4.11: Showing the deficiencies in the usage of NEFT facilities
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Lack of secure
12
38
No confidence
10
31
Others
10
31
32
100
Total
Source: From Survey
ANALYSIS: The deficiencies in the usage of NEFT facility can be distinguished

as lack of secure, no confidence and others. These are the main types of
deficiencies which a customer may have in his mind regarding NEFT.
Graph 4.11: Showing the deficiencies in the usage of NEFT facilities
INTERPRETATION: From the above graph we can interpret that 38% of the respondents
have is no proper security while transferring of funds through NEFT system. 31% have no
Page 45

confidence and 31% have some other reasons like cost. Problem may be due to thinking the
problem of hacking and no proper knowledge and so may be the reason most of the customer
hesitate to use NEFT system

Page 46

4.12 DUE TO LACK OF SECURITY NEFT SYSTEM IS NOT
ACCEPTED BY CUSTOMERS
Table 4.12: Showing due to lack of security NEFT system is not accepted by customers
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
16
50
No
16
50
32
100
Total
Source: From Survey
ANALYSIS: Above table shows that how many customers think that security
issues act as a lack to the NEFT system of payment. It can be classified as Yes or
No.
Graph 4.12: Showing due to lack of security NEFT system is not accepted by customer
INTERPRETATION: From the above graph we come to know that 50% of respondents
think that lack of security and 50% dont think that there is a lack of security in NEFT
system.

Page 47

4.13 RISK OF MISAPPROPRIATIONS WHILE
TRANSFERRING OF FUNDS IN CASE OF NEFT
Table 4.13: Showing risk of misappropriations while transferring funds in NEFT
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
12
37
No
20
63
32
100
Total
Source: From Survey
ANALYSIS: From the above table, we can come to know that among the selected
respondents the percentage of people who think that misappropriations are more
while transferring of funds through NEFT and vice versa. The above table can be
analyzed that in the sample size selected the respondents have a belief that due to
misappropriations NEFT facility is not popular and not being adopted by the
account holders for larger volume of transactions.
Graph 4.13: Showing risk of misappropriations while transferring funds in NEFT

Page 48
INTERPRETATION: The above graph represents 37% think that misappropriations are
more in case of transferring of funds while 63% think that due to improve technology
misappropriations can be reduced.
4.14 UP GRADATION IN TECHNOLOGY HAS AN EFFECT ON LACK

OF SECURITY WHILE TRANSFERRING OF FUNDS THROUGH
NEFT
Table 4.14: Showing up gradation in technology effects on lack of security in NEFT
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Agree
16
50
Disagree
16
50
32
100
Total
Source: From Survey
ANALYSIS: From the above table we can come to know whether an up gradation
in technology has an effect on the lack of security while transferring of funds
through NEFT. The respondents have given their answers like whether they agree
to this point or not.
Graph 4.14: Showing up gradation in technology effects on lack of security in NEFT

Page 49
agree and 50% does not agree for the upgradation in technology effects lack of security. So
some customers think that due to technology up gradation security is not there but in reverse
case some people think that due to up gradation in technology even security has been
improved.
4.15 NUMBER OF RTGS USERS

Table 4.15: Showing the number of RTGS users
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
32
80
No
20
40
100
Total
Source: From Survey
ANALYSIS: The above table shows the number of RTGS users among the
selected respondents. Out of that 80% of the sample is currently using the
RTGS facility and remaining 20% are not using or not aware of using this mode
of payment system.
Graph 4.15: Showing the number of RTGS users

Page 50
INTERPRETATION: From the above graph, we can come to know that there are users of
RTGS system ie., 80% of the population are using this system but 20% are not using or not
aware of using this mode of payment system. So it can be interpreted that only 20% of the
sample are not using RTGS as a mode of transferring the money.

Page 51

4.16 FREQUENCY OF THE USAGE OF RTGS SYSTEM
Table 4.16: Showing the frequency of the usage of RTGS system
FREQUENCY
RESPONDENTS
PERCENTAGE (%)
Once in a week
25
Once in a month
10
31
Very often
19
Once in quarter
25
32
100
Total
Source: From Survey
ANALYSIS: The above table shows the frequency of the usage of transferring
of their funds through RTGS. It can be considered as Once in a week, Once in a
month, Very often or Once in quarter.
Graph 4.16: Showing the frequency of the usage of RTGS system
INTERPRETATION: It is observed that 25% of the respondents frequently uses NEFT

system ie., once in a week, 31% of the respondents use once in a month, 19% use very
often and 25% of the respondents use once in quarter. By this we can interpret that

Page 52

though the users of RTGS are more among the selected population, but the frequency of
users are very less ie., Very often.
4.17 THE EXPERIENCES OF THE RESPONDENT WHEN USING

RTGS
FACILITIES
&
HOW
SOON
THEY
RECEIVE
CREDIT/DEBIT IN THEIR ACCOUNT

Table 4.17: Showing the credit/debit receive in their account through RTGS
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
> 2 hours
19
< 2 hours
22
69
Others
12
32
100
Total
Source: From Survey
ANALYSIS: The above table we can analyze that the respondents who are using
RTGS system, their experiences while using the system and also in how many
hours or time span the amount will be credited or debited in their account and it is
broadly classified as more than 2 hours, less than 2 hours or any other.
Graph 4.17: Showing the credit/debit receive in their account through RTGS

Page 53
INTERPRETATION: From the above graph, we can interpret the 19% of the respondents
using RTGS facilities for the purpose of transferring money receive a credit/debit in their
account in more than 2 hours, 69% receive less than 2 hours and 12% of them receive in
more than 4 hours due to some technical issues.

Page 54

4.18 RESPONDENTS OPINION OR DIFFICULTY WHILE FILLING
THE RTGS FORM
Table 4.18: Showing the opinion or difficulty while filling the RTGS form
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
22
69
No
10
31
32
100
Total
Source: From Survey
ANALYSIS: The above table we can come to know the opinion of the respondents
while filling the RTGS form. The difficulty in filling the form can be classified as
Yes or No which states that whether the respondents are facing difficulty while
filling the form or they do not have any difficulty while filling it.
Graph 4.18: Showing the opinion or difficulty while filling the RTGS form
INTERPRETATION: From the above graph we can come to know that 31% of the selected
respondents dont have any difficulty while filling the RTGS form and 69% of them found
the difficulty in filling it. By this we can interpret that majority of the respondents face
difficulty filling the RTGS form.

Page 55

Page 56

4.19 TYPE OF CUSTOMERS THE BANK MAY HAVE LARGE
NUMBER OF RTGS TRANSACTIONS
Table 4.19: Showing the type of customer who uses RTGS on a large basis
TYPE
RESPONDENTS
PERCENTAGE (%)
Business
12
38
Government Employees
Retired Persons
Others
17
53
32
100
Total
Source: From Survey
ANALYSIS: The above table we can analyze that type of customer a banker may
have who use RTGS transactions on a larger basis. The type of customer may be
divided as businessmen, government employees, retired persons and others.
Graph 4.19: Showing the type of customer who uses RTGS on a large basis
INTERPRETATION: For the above graph we can interpret that 38% of the businessmen
and 53% others are using this facility on a larger basis. Only 6% of government employees

Page 57

and 3% of retired persons are negligible in number as they may not be having any such large
transactions to happen. So to conclude we can say that businessmen and others are the people
who use RTGS on a larger basis.
4.20 DEFICIENCIES IN THE USAGE OF RTGS FACILITIES

Table 4.20: Showing the deficiencies in the usage of RTGS facilities
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Lack of secure
14
44
No confidence
15
Others
13
41
32
100
Total
Source: From Survey
ANALYSIS: The deficiencies in the usage of RTGS facility can be distinguished

as lack of secure, no confidence and others. These are the main types of
deficiencies which a customer may have in his mind regarding RTGS.
Graph 4.20: Showing the deficiencies in the usage of RTGS facilities
have is no proper security while transferring of funds through RTGS system. 15% have no
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confidence and 41% have some other reasons like cost. Problem may be due to thinking the
problem of hacking and no proper knowledge and so may be the reason most of the customer
hesitate to use RTGS system

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4.21 DUE TO LACK OF SECURITY RTGS SYSTEM IS NOT
ACCEPTED BY CUSTOMERS
Table 4.21: Showing due to lack of security RTGS system is not accepted by customers
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
13
41
No
19
59
32
100
Total
Source: From Survey
ANALYSIS: Above table shows that how many customers think that security
issues act as a lack to the RTGS system of payment. It can be classified as Yes or
No.
Graph 4.21: Showing due to lack of security RTGS system is not accepted by
customers
INTERPRETATION: From the above graph we come to know that 41% of respondents
think that lack of security and 59% dont think that there is a lack of security in RTGS
system.

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4.22 RISK OF MISAPPROPRIATIONS WHILE TRANSFERRING OF
FUNDS IN CASE OF RTGS
Table 4.22: Showing risk of misappropriations while transferring funds in RTGS
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Yes
15
53
No
17
47
32
100
Total
Source: From Survey
ANALYSIS: From the above table, we can come to know that among the selected
respondents the percentage of people who think that misappropriations are more
while transferring of funds through RTGS and vice versa. The above table can be
analyzed that in the sample size selected the respondents have a belief that due to
misappropriations RTGS facility is not popular and not being adopted by the
account holders for larger volume of transactions.
Graph 4.22: Showing risk of misappropriations while transferring funds in RTGS

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INTERPRETATION: The above graph represents 53% think that misappropriations are
more in case of transferring of funds while 47% think that due to improve technology
misappropriations can be reduced.
4.23 UP GRADATION IN TECHNOLOGY HAS AN EFFECT ON LACK

OF SECURITY WHILE TRANSFERRING OF FUNDS THROUGH
RTGS
Table 4.23: Showing up gradation in technology effects on lack of security in RTGS
PARTICULARS
RESPONDENTS
PERCENTAGE (%)
Agree
19
59
Disagree
13
41
32
100
Total
Source: From Survey
ANALYSIS: From the above table we can come to know whether an up gradation
in technology has an effect on the lack of security while transferring of funds
through RTGS. The respondents have given their answers like whether they agree
to this point or not.
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Graph 4.23: Showing up gradation in technology effects on lack of security in RTGS
agree and 41% does not agree for the upgradation in technology effects lack of security. So
some customers think that due to technology up gradation security is not there but in reverse
case some people think that due to up gradation in technology even security has been
improved.
4.24 COMPARISON ON NUMBER OF NEFT AND RTGS USERS

Table 4.24: Showing comparison on the number of NEFT & RTGS users
USERS
RESPONDENTS
PERCENTAGE (%)
Only NEFT
20
Only RTGS
20
Both RTGS & NEFT
24
60
40
100
Total
Source: From Survey
ANALYSIS: From the above table we conclude that if we take only the users of
NEFT or RTGS payment system then the number of users for only NEFT or only
RTGS is very low.

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Graph 4.24: Showing comparison on the number of NEFT & RTGS users
use NEFT only and 20% of RTGS only. But if we take both NEFT & RTGS users the
numbers of respondents are less because it is due to awareness of the payment system.

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CHAPTER - 5
SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSIONS
5.1 FINDINGS
During the survey of research study it is found that most of the customers are not
aware of the payment systems like RTGS & NEFT.
The bank is using the technology and has adopted the recent payment systems
like NEFT and RTGS which is useful for faster clearing of the transaction and
also in quick transfer of money.
It is found that customers feel there is more service charges included in case of
RTGS system of transactions. Because one of this reason many of them hesitate
to adopt this type of payment system.
It is found that RTGS is meant for only larger transactions so there is a minimum
limit is case of transferring of funds through RTGS system so this mode of
payment system is not meant for those transactions which constitutes for smaller
transactions within the minimum limit.
During the transfer of funds it is found that two factors are involved. In the first
factor it is found that information will be transferred from the payer bank to the
payee bank and the second factor includes that settlement of funds takes place
between the banks.
It is observed that some of the customer who are willing to use this type of
transactions may hesitate to use this due to lack of security. As in the survey
conducted we can know majority of them have think that there is a lack of
security in RTGS and NEFT payment system.
As stated earlier there are woe factor involved in transfer of banks. The first
factor is the transfer of the information from one bank branch to another. So it is
found that sometimes while transferring of funds from one bank branch to
another, the information can be misappropriated and the whole transactions may
be lost.

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5.2 SUGGESTIONS
With reference to analysis and findings of the study and my personal experience the
following suggestion are made:
It is suggested that before doing any transactions which is related to the payment
system especially the NEFT and RTGS system, they have to ensure that there is
proper security measures taken while the transfer of money from one branch
account to another is taking place.
It is suggested from the bank that the participants while transferring should
appoint one of its staff to safeguard communication in NEFT and RTGS system.
As per the survey conducted, most of the customers are not willing to accept this
type of payment system as they have the fear of security issues and most of them
think that these security issues are happening only because of up gradation in
technology so it is very much necessary for the bankers to take care of the
security issues.
It is suggested that RTGS and NEFT should be given importance and the
information about it should be conveyed, as many of the customers would not be
having any idea about what actually it is.

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5.3 CONCLUSIONS
Based on data analysis and discussion that mentioned, it can be concluded that the
responses of respondents partially agree up gradation of technology effects security in
RTGS and NEFT system. Findings reveal that Banking facilities like RTGS and NEFT
have satisfied most of people banking needs. Most bank clients enjoy using e-Banking,
this results into a high level of satisfaction. It is very necessary to pay attention to the
risk related issues and a service charge of the payment systems RTGS and NEFT as it
lowers the level of satisfaction. Findings revealed that there is a weak positive
relationship between Electronic banking and customer satisfaction. It is therefore true to
say that Electronic banking has a significant effect on customer satisfaction. Awareness it
to be created among the usage of RTGS and NEFT payment systems as many of them
are not aware of the system itself.
Thus, I feel proud in doing my project in a well established bank which is doing a great
job as it is practicing both NEFT and RTGS system of payment. I wish to conclude by
saying that Apex Bank should increase the number of branches in other cities for further
growth and to extend its customer loyalty.

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5.4

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Customer Satisfaction towards RTGS & NEFT

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Customer Satisfaction towards RTGS & NEFT

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Customer Satisfaction towards RTGS & NEFT facilities

1.1 PRE-INDEPENDENCE BANKING SCENARIO IN INDIA

ACHARYA BANGALORE B-SCHOOL